Cinedigm Closes $16.4 Million Acquisition of Digital Media Rights

Cinedigm March 29 announced the completion of its acquisition of Digital Media Rights, a specialty streaming, advertising, and content distribution company. The $16.4 million acquisition closed on March 28, and is payable in installments, with the first payment of $8 million in cash.

Cinedigm will make additional payments totaling $8.4 million in cash or stock at the company’s discretion. The Los Angeles-based distributor will pay annual installment payments of $3 million, $3 million and $2.4 million at 12, 24, and 36 months from the closing date, respectively. Cinedigm expects the acquisition will generate approximately $10 million in incremental revenue and $3 million in incremental pre-tax earnings over the next 12 months.

The acquisition of DMR scales up Cinedigm’s presence to more than 30 streaming channel services, 46,000 movies and television episodes, and 40 million monthly viewers, while adding approximately 18.5 million social subscribers and more than 4 billion monthly views.

Founded more than a decade ago by Michael Hong and David Chu, the New York-based DMR focuses on four key streaming-based businesses: feature films and television series for the streaming ecosystem; 10 streaming channels focused on enthusiast audiences, including six proprietary streaming services available as free ad-supported streaming television (FAST) channels; and video-on-demand apps.

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DMR curates social video channels for its streaming brands and brings extensive expertise in curating content to help drive new distribution, revenue, and marketing opportunities. DMR also operates an ad network and marketplace generating more than 100 million connected TV impressions a month.

“We were very deliberate in structuring a deal that works not only to the advantage of DMR and Cinedigm, but also to that of our shareholders, particularly given current financial market conditions,” Chris McGurk, chairman/CEO at Cinedigm, said in a statement.

DMR’s Hong said both companies are “incredibly aligned,” tapping into collective resources and areas of expertise to scale streaming services.

“We have been on an incredible journey since starting this company, during which we have watched the streaming video ecosystem evolve, as our industry has transformed and the way we consume content has been disrupted,” he said. “Cinedigm’s clear understanding of this evolution and transformation, and our shared vision, is a big part of what makes this deal such a logical and attractive one for all parties.”

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