UPDATED, July 3, 6:15PM: Digital Domain issued a statement today to clarify any misconceptions about its ownership in the wake of the deal: “A press release issued on July 2, 2014 announcing the purchase of a 30.2% stake by Mumbai-based Reliance Media Works in Prime Focus Ltd. implied that Prime Focus now has access to or control over the visual effects house Digital Domain 3.0. This transaction had no effect on the management and control of Digital Domain 3.0, which remains unchanged. Digital Domain Holdings Limited in Hong Kong continues to be the majority owner of Digital Domain 3.0.”
PREVIOUSLY: The deal, announced in India overnight, is Prime’s latest move to build a globe-girdling VFX and media-services company, and it comes just days after Prime Focus World merged with Oscar-winning UK effects house Double Negative. The newest deal will merge Reliance Capital subsidiary Reliance MediaWorks’ film and VFX operations — which also include Lowry Digital, a 30-percent share of Digital Domain and 1M square feet of production and post-production facilities in Mumbai — to make what the companies called the world’s largest independent VFX and animation house. Money from the Reliance buy-in, an infusion of about $40 million, will finance the Double Negative merger and further expand operations, the companies said in a release. In return, Reliance Capital will get a 30-percent stake in the merged company, which will headed by Prime Focus executive Chairman and CEO Namit Malhotra. Reliance previously held a stake in Prime Focus, but exited after Prime went public in 2006. Read More »
VFX specialist Prime Focus has offices in LA, NY, Vancouver, London and Mumbai, and earlier this week added Beijing to its international outposts. Its global footprint has made it more immune to the problems U.S.-based VXF firms like Rhythm & Hues have had sustaining a viable business model. Today, Prime Focus is announcing a $53M equity infusion from Macquarie Capital. The money will be deployed in two phases, with $38M committed in the first phase and $15M in a second transactional phase. Prime Focus says the funds will go towards the build-out of its global creative services platform and near-term strategic acquisitions. The company provides visual effects, animation and stereo View-D conversion services. Recent credits include stereo VFX, 3D conversion and archive footage colorization work on Baz Luhrmann’s The Great Gatsby as well as on World War Z.
Prime Focus already has a global footprint with offices in the LA, NY, Canada, the UK and India. That makes it more immune to the problems American-based VXF firms like Rhythm & Hues have had sustaining a viable business model (Prime Focus was one of four companies in the running in the R&H bankruptcy auction eventually won by another global firm, India-based Prana Studios). In March, Prime Focus announced a Chinese joint venture with Hong Kong–based private equity group AID Partners and local partner Zhejiang Jingqi Wenhua Chuanbo Co to invest $3M in a new operation that will provide 2D/3D conversion, VFX and postproduction services on the mainland and in Hong Kong, Macau and Taiwan. Its recent credits included stereo VFX, 3D conversion and archive footage colorization work on Baz Luhrmann’s The Great Gatsby. Here’s today’s release out of the Shanghai International Film Festival announcing the Beijing opening: Read More »
UPDATED: It’s coming down to the wire for bankrupt VFX house Rhythm & Hues. Today at 5 PM is the deadline Federal Court Judge Neil Bason set for interested buyers to submit qualified bids for the company ahead of a March 27 auction. I’m told at least four bidders will be entering the fray, including Prime Focus, Prana Animation, Psyop, and Rocket Science 3D, and possibly others. Korean company JS Communication this week dropped out as the court-approved stalking horse bidder, which would have guaranteed Rhythm & Hues a minimum bid at auction. That surprise hiccup sprang from recent failed talks between JS and studios Fox and Universal, which last month teamed to bail out Rhythm & Hues with a $17 million DIP loan. JS rep David Shim told Deadline the two studios were uncooperative when he asked for a non-binding handshake agreement to $60 million worth of work per year for three years to ensure Rhythm & Hues had financial lifeblood through a post-sale rebuilding phase. He also says he agreed to pay an additional $3M to cover operational costs for the company. But a source with knowledge of the talks claims Shim was asking for a binding guarantee as well as additional financial commitments, a tall order in an industry where production and release schedules for studio films are always potentially in flux.
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Prime Focus Pulls Into China; UK May Shore Up VFX Industry
The gloomy VFX scene saw a few bright spots in the international market today. In the UK, the 2013 budget was unveiled and along with it, news that the Treasury will launch a public consultation on options to provide further support for the VFX industry via the tax system. In total, the creative industries received an extra £25M to help boost economic growth. Meanwhile, VFX specialist Prime Focus said it is setting up a Chinese joint venture with Hong Kong–based private equity group AID Partners and local partner Zhejiang Jingqi Wenhua Chuanbo Company. Prime Focus, which is listed on the Bombay Stock Exchange and has offices in the U.S., Canada, the UK and India, will invest $3M in the new operation which will provide services including 2D/3D conversion, VFX and post-production services on the mainland and in Hong Kong, Macau and Taiwan. At the same time, AID, whose investments include Legendary Pictures and HMV Asia, has invested $10M in Prime Focus’ Netherlands subsidiary, Prime Focus World NV. The group’s credits include Shrek, Transformers 3, Harry Potter And The Deathly Hallows Part 2, The Smurfs and Men In Black 3. Read More »