French audiovisual group Technicolor has agreed to sell its 25.7% stake in ContentGuard Holdings, a licensor of digital rights management, to US-based Pendrell Corporation, a provider of IP solutions.
Pendrell will acquire an additional 64.4% stake in…
French audiovisual group Technicolor has agreed to sell its 25.7% stake in ContentGuard Holdings, a licensor of digital rights management, to US-based Pendrell Corporation, a provider of IP solutions.
Pendrell will acquire an additional 64.4% stake in ContentGuard from the other shareholders, bringing its interest in the company to 90.1% for US$90.1m in cash.
Time Warner will hold the remaining 9.9%, allowing it to appoint a representative to the ContentGuard board of directors.
The deal, which is subject to a filing under the Hart-Scott-Rodino Antitrust Improvements Act, is expected to close by the end of the year. Pendrell declined to comment on the potential advisers hired for the transaction.
Technicolor said in a statement that it plans to use the net disposal proceeds of US$24.4m for the prepayment of its debt. The company explained: “This transaction is in line with the group’s strategy to focus on the monetisation of its IP assets. Technicolor has seized this opportunity to monetise its stake in ContentGuard acquired in 2005 and will record a capital gain estimated at US$11.5m at the closing of the transaction.”
The French company, previously known as Thomson, has been selling off several assets in recent months, having spent much of 2008 and early 2009 struggling to manage its onerous €2.8bn debt burden which forced it to undertake a significant restructuring plan.
In March, Technicolor received a binding offer from local capital development fund FCDE to acquire Thomson Video Networks, which has a portfolio of video encoders and MPEG processors.
Before the Thomson Video Networks sale, Technicolor had announced the sale of its Grass Valley Broadcast business to San Francisco-based private equity firm Francisco Partners for approximately US$100m.
And in October 2010, the French audiovisual group had said that it would be selling the majority of its 50% stake in cinema advertiser Screenvision US to Shamrock Capital Growth Fund II.
As for the ContentGuard sale, announced at the end of September, this is not only a milestone for the seller Technicolor, which is nearing the end of its asset selling strategy, but also for the acquirer Pendrell.
This is the first time that Pendrell Corporation, the parent of Pendrell Technologies, has sealed a strategic acquisition under its new name as the company has shifted away from satellite to becoming IP-focused
In late June, Pendrell Corporation, which was still known as ICO Global, acquired intellectual property business solutions firm Ovidian Group.
Having agreed to sell its medium earth orbit assets to South African investment company Jay & Jayendra at the beginning of the year, ICO Global essentially no longer has any satellite assets.
Instead, the newly-named company will consist of the proceeds of that sale, proceeds from DISH Network’s US$1.4bn acquisition of DBSD North America, in which ICO was a shareholder, and any damages awarded by the court to ICO in the ongoing litigation with Boeing.
This is a significant sum given that ICO will receive at least US$325m from the DISH transaction and has been awarded US$631m in damages in the Boeing case, subject to appeal.
