Gaiam Completes Sale of Entertainment Distribution Business

BOULDER: Gaiam has completed the sale of its entertainment-distribution arm, Gaiam Vivendi Entertainment, to Cinedigm Corp. for $51.5 million, plus an additional cash consideration.

The adjustment for closing net working capital is expected to total approximately $5 million to $7 million, Gaiam said today. The company is remaining focused on its health and wellness business, including fitness media content and products and Gaiam TV, a streaming service delivering more than 5,000 exclusive video titles.

For Cinedigm, the acquisition of GVE, which has a slew of home-entertainment distribution deals with content companies in the U.S., is intended to bolster its positioning as a leading distributor of independent film, TV and digital content across multiple platforms. Cinedigm says the combined company will be the largest aggregator and distributor of independent content and the fourth-largest distributor of non-theatrical DVDs and Blu-ray discs in the U.S., with annual sales exceeding $320 million from both physical products and digital sales. It will also house a library of digital distribution rights covering more than 32,000 titles and episodes.

“This acquisition of GVE gives Cinedigm immediate scale and leverage across the entire entertainment value chain," said Cinedigm's chairman and CEO, Chris McGurk. "The combination of GVE’s deep stable of consumer-friendly brands and unique direct retail relationships, paired with Cinedigm’s tremendous strength in the rapidly evolving digital distribution space as well as our theatrical releasing and over-the-top network businesses, creates a powerful and game-changing entity poised to take full advantage of the content distribution revolution."

Bill Sondheim, GVE's president, will join Cinedigm as president of the Cinedigm Entertainment Group (CEG), reporting to McGurk and COO and CFO Adam Mizel. "I have known Chris for many years, having previously worked for him at Polygram Entertainment, and look forward to growing Cinedigm’s entertainment business with him and the entire Cinedigm team. Cinedigm’s industry-leading digital platform, film releasing business and emerging networks initiative, enhanced by GVE’s direct physical goods, digital platform, retail relationships and brands, will make CEG an even more powerful and unique competitor in our evolving industry.”