Visual effects firm Digital Domain sold for $30M
Monday, September 24, 2012
NEW YORK (AP) — The bankrupt digital production company founded by director James Cameron will be sold to a joint venture formed between a Chinese media company and an Indian counterpart for $30.2 million.
A U.S. subsidiary of Beijing Galloping Horse Film & TV Co. and Mumbai-based Reliance MediaWorks teamed up to outbid other companies in a bankruptcy court auction Friday. The deal was announced by the companies Sunday night.
"Digital Domain is a legend in the industry, known for its world-class quality of work and creative talent," Ivy Zhong, vice chairman and managing director of Beijing Galloping Horse Film, said in a statement.
Galloping Horse will own 70 percent of the joint venue, with Reliance owning the other 30 percent.
"We have had a wonderful working relationship with Digital Domain over the years and we could not be happier to take it further," added Venkatesh Roddam, CEO of film & media services at Reliance MediaWorks.
Digital Domain, best known for its work on Cameron's "Titanic," has produced visual effects for more than 90 movies, including "Pirates of the Caribbean: At World's End" and the "Transformers" series. In April, its Tupac Shakur hologram made a splash when it took the stage at the Coachella Valley Music and Arts Festival and appeared to perform alongside Snoop Dogg.
But it defaulted on a series of loans and earlier this month said it would lay off about 280 workers and close its Florida facility. CEO John Textor, also the company's second-largest shareholder, resigned, protesting the decision.
The company filed for Chapter 11 protection in U.S. Bankruptcy Court for the District of Delaware on Sept. 11 and sought similar protections from a Canadian court. The move came less than a year after Digital Domain went public, selling nearly 5 million shares at $8.50 each, below the expected $10 to $12 range.
The sale is subject to approval by the bankruptcy court. A hearing is scheduled for Monday.
The joint venture, known as Galloping Horse_Reliance, will acquire all assets of Digital Domain including its feature film and advertising visual effects, commercial production and "virtual humans," in addition to studios in California and Vancouver, Canada. It will also take a co-production stake in the feature film Ender's Game.
At the time of its bankruptcy filing, the company had announced a sale of its assets to private investment firm Searchlight Capital Partners LP for $15 million. However, during the auction process, higher bids were received.
Based in Port St. Lucie, Fla., Digital Domain has studios in California and Canada that create digital visual effects, animation and digital production for the entertainment and advertising industries. The company had spent the past few years building a new animation studio in Port St. Lucie, using millions in incentives from the city and the state.
Florida Gov. Rick Scott has ordered his inspector general to investigate the process used to award millions in state incentives that were used to lure Digital Domain to the state.
The company said last month in its quarterly financial report that it had already received about $50 million of $80 million in grants it was awarded by the state of Florida, and that it had spent the money on workers' pay and to cover expansion costs.
One of the biggest shareholders in the company is former Miami Dolphins quarterback Dan Marino, who is listed in bankruptcy filings as owning 1.6 million shares.
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