 "Prime Focus World merges Hollywood VFX business with Europe's Double Negative")
Global media and entertainment industry services leader Prime Focus Limited has announced the merger of its creative services subsidiary Prime Focus World (PFW) and Double Negative (DNeg), one of the largest visual effects services providersto the global film industry.
Under the agreement, the newly formed Double Negative entity, which will include the VFX line of businessunder PFW, will be a 100% subsidiary of Prime Focus World.
The details of the financial structure are subject to approval by authorities, and hence unavailabel at the moment, informed the company.The 3D conversion business and theanimation business will continue to function under PFW, as they donow.
The goal behind this deal and the ensuing business restructuringis to capitalise on the credibility and brand image of DoubleNegative and create a differentiation between the VFX offerings and3D conversion and animation services.
"This is a transformational event -both for the companies involved and for the industry," said PrimeFocus founder and CEO of Prime Focus World, Namit Malhotra.
"PrimeFocus has proven over the last five years the undeniable benefits ofglobal collaboration: the flexibility of working in different timezones; the coming together of creative talent from across the globe;and the ability to leverage tax incentives. We can now bring thistogether with Double Negative's unquestionable creative excellenceto build a truly formidable offering."
Established in 1998, Double Negative isEurope's largest independent VFX house with honors including anAcademy Award (for Inception) and two BAFTAs (for Inception and HarryPotter and the Deathly Hallows Part 2).
The transaction will besupported by Standard Chartered Private Equity, Macquarie Capital andAID Capital Partners, all existing investors in Prime Focus entities,and existing bankers across the Group, Centrum Capital. The existinginvestors will be providing equity and debt financing for thetransaction.
The combined revenues of the PFWcreative services and Double Negative are upwards of $200 million,informs Malhotra.
The new VFX business, which will tradeunder the 'Double Negative' brand, will be led by DNeg'scurrent management team of Alex Hope (Managing Director) and MatthewHolben (CEO).
In addition to the existing creative talent at itsLondon and Singapore facilities, Double Negative will be opening inVancouver by bringing key talent and technology besides havingcomplete access to all production and technology infrastructure inIndia.
"We have ambitious plans to build onwhat we've achieved in VFX over the last 15 years," said DoubleNegative's management team of MatthewHolben (CEO) and Alex Hope (Managing Director).
"This deal allowsDouble Negative to develop into a truly global operation thatprovides great work for our clients and great opportunities for ourstaff."
For Prime Focus the deal offers a clearpath to growth where revenues would have more than doubled.With a combined order book of Rs US$ 150 million (Rs 900 crore), the company will be in a strong position tosustain growth, generate free cashflows, pare down debt by Rs 30-40% over the next four to sixquarters and offer significant value to its stakeholders.