Posts Tagged ‘Shamrock Capital Growth Fund II’

RealD Files Prospectus for $200m Secondary Stock Offering. All Proceeds Destined for Current Shareholders Rather than the Company Itself.

broadcast technology market research | Posted by Joe Zaller
Nov 29 2010

RealD, a global licensor of 3D technologies, last week filed a prospectus with the Securities and Exchange Commission to sell 7,815,001 shares of its common stock, along with an additional 1,172,250 shares as an over-allotment.  Based on today’s stock price of around $26.50, this translates to about $207m (about $238m is the overallotment shares are also sold).  

It’s always interesting to read this kind of document because it offers information about the company’s financial performance and business strategy.  RealD’s prospectus is also interesting because it provides useful data about the take-up of 3D, which is something that many in the broadcast industry are working to understand.

What’s also interesting about this deal is that apparently none of the money from the offering will go to RealD.  Instead, it will all go to current stockholders, including directors and executives.

According to the prospectus filed with the SEC “The selling stockholders, including certain members of our board of directors and management, will receive all of the proceeds from this offering, and we [the company] will not receive any proceeds from the sale of shares in this offering.”

The largest beneficiary will be Shamrock Capital Advisors, whose “Capital Growth Fund II” is selling almost 5.4 million shares of RealD, or 99.9% of its holdings in the company, as part of the offering.   

Other company insiders will benefit as well.  For example, both company chairman and CEO Michael Lewis and company president Joshua Greer are selling 10% of their holdings in the company.  Lewis and Greer stand to gain about $17m each from the offering, and almost $30m each if all the shares allocated for overallotment are sold. Company CFO Andrew Skarupa is also selling 10% of his current holdings in the company for about $2.2m.  Skarupa will make about $3.8m if all the shares allocated for overallotment are sold.

Several others affiliated with the company are also using the offering to sell “restricted stock unit awards that are exercisable within 60 days of September 24, 2010.”

It’s interesting to see so many RealD insiders selling their shares on the heels of their IPO, which was just over four months ago.  Especially when you consider a Wall Street Journal article published at that time, which said that “company insiders and investors at RealD raised more money in the company’s recent initial public offering than the company did.”

Lewis and Greer each received $17.1m in July of this year when they both sold 1.15 million shares in the company’s IPO.  Skarupa made about $2.2m from the company’s IPO.  Shamrock, who recently bought Screenvision from Technicolor and ITV, made about $34.4m when it sold 2.3 million RealD shares during the company’s IPO.

The chart below shows a breakdown of how many shares are being sold by each shareholder, along with the amount they stand to receive for these shares for both the initial and overallotment offerings.  Please note that this chart assumes a share price of $26.50 per share (the price at the time of writing).

Sellers of RealD shares (values based on a share price of $26.50.  Source RealD Form S-1 filed with SEC on 11/22/2010

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You can read the full RealD share offering prospectus here.

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Technicolor Announces Q3 Results. Grass Valley Sale Progressing Towards End of Year Close. Remaining Business Units Post Double Digit Revenue Growth.

Broadcast technology vendor financials, Broadcast Vendor M&A, Quarterly Results | Posted by Joe Zaller
Oct 21 2010

Broadcast and creative services provider Technicolor announced its Q3 results today.

Revenue for the quarter was €906m, up 12.9% at current exchange rates versus the same period a year ago.  At a constant exchange rate, revenues were up 7.2%.

These numbers exclude discontinued operations– i.e. Grass Valley and the Media Networks (PRN, Screenvision) businesses.  However the company did briefly discuss these businesses in its earnings announcement:

Commenting on the previously announced sale of the Grass Valley broadcast business to Francisco Partners, Technicolor said that it has “progressed on the carve out and consultation actions required to close the sale of its Broadcast activities by the end of the year,” and that “consultations of workers representatives for Grass Valley restructuring have been finalized, including in France.”

The company recently announced that it had sold the majority of its 50% stake in Screenvision US to Shamrock Capital Growth Fund II, in return for $60 million in cash that will be applied to the Disposal Proceeds Notes issued as part of the financial restructuring closed in the first half of 2010.

Technicolor said that each of its three remaining business units all enjoyed double digit growth during the quarter, and provided the following detail:

  • The technology BU benefited from a strong increase in revenues from MPEG LA, driven by growth in consumer electronic products and by the outcome of audits of past product volumes for certain licensees.
  • The Entertainment Services BU had growth across all activities except photochemical Film, mainly as a result of higher level of activity in Creation Services and improved volumes in DVD Services, driven by the start of the Warner Bros. agreement in August along with continued growth in overall Blu-ray™ volumes and improved market trends in DVD.
  • Digital Delivery revenues increased compared with the same period last year, reflecting notably strong volume growth in Connect and Media Services.

 

Commenting on the results, company CEO Frederic Rose said “Our ability to generate growth in all of our businesses in the third quarter has been driven by the Group’s refocus. Also, the disposal of Screenvision and the announcement of the sale of Broadcast in the third quarter confirm that we are delivering on our disposal program. We are well on track to deliver on our 2010 objectives.”

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You can read the full Technicolor Q3 earnings announcement here.

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Having Found a Buyer For Grass Valley, Technicolor Now Sells Majority of its Stake in Screenvision

broadcast industry trends, broadcast technology market research, Broadcast technology vendor financials, Broadcast Vendor M&A | Posted by Joe Zaller
Sep 27 2010

As part of its previously published strategy of refocusing its efforts on content creators and network service providers, Technicolor announced today that it has sold the majority of its ownership stake in cinema advertising company Screenvision US for $60m in cash.

The buyer is the Shamrock Capital Growth Fund II, a private equity fund focused on media, entertainment and communications.

Technicolor, which called the sale “another important milestone in our disposal program,” says it will apply the proceeds of the transaction towards repayment of its Disposal Proceeds Notes (DPN), which totaled €260m as of the company’s last earnings release.  Technicolor’s “disposal program” includes the previously announced deal whereby Francisco Partners has agreed to acquire Grass Valley.

Under the terms of the deal, Technicolor will receive $60m in cash in exchange for a portion of its 50% ownership in Screenvision, which was previously a joint-venture between UK broadcaster ITV plc and Technicolor. 

Technicolor will retain an 18.8% interest in a newly-formed Screenvision holding company, along with one seat on the new company’s board of directors.

Interestingly, Technicolor will continue to provide services to Screenvision.  According to Technicolor CEO Frederic Rose, “We will keep a minority stake in Screenvision due to our close business relationship and will continue to be Screenvision’s provider of both film and digital services.”  According to the company’s press release, the film processing & distribution agreement extends through end of life.

The transaction is pending regulatory approval and customary closing conditions and is expected to close in the fourth quarter 2010.

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You can read the full Technicolor announcement of the sale here.

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