files/pictures/picture-35.jpgGaiam Inc., a lifestyle-media company catering to people who value personal development, natural health and inspirational entertainment, announced that it has signed a definitive agreement to acquire substantially all of the assets of GoodTimes Ent.
GoodTimes Ent. is a media company that creates and distributes entertainment programming and home video products through various channels, including television, theaters, retailers and the Internet. GoodTimes Ent.'s library contains approximately 2,000 titles, including wellness franchises such as THE FIRM and TAE BO, children classics such as BENJI and numerous theatrical releases.
With the acquisition of GoodTimes Ent., Gaiam expects to generate more than $200 million in annual revenues and, in addition to its television and theatrical distribution, Gaiam's home media will be carried by more than 40,000 retail stores in U.S., which will be the widest direct distribution coverage in the country for any content provider. Gaiam also expects to distribute 20 million catalogs per year and have approximately 7 million direct customers.
Following the acquisition, Gaiam will be one of the top 10 studios based on overall DVD market share and will have the sixth largest market share, ahead of major studios such as Twentieth Century Fox, Universal, Columbia Tristar and MGM, for all non-theatrical DVDs, according to data provided by Nielsen Videoscan. In the company's core wellness/fitness category, Gaiam will extend its leading market share to approximately 37%.
"GoodTimes Ent. is a perfect strategic fit for Gaiam," said Lynn Powers, president. "We are uniquely positioned to leverage our existing direct and retailer infrastructure, as well as capitalize on their expertise in direct response TV and subscription clubs, to double the revenue in our direct business. Their complementary library of titles in health and fitness, along with their children's and theatrical titles, can be leveraged across our specialty retail distribution, including our 4,300 existing store-within-store relationships."
"We believe that this acquisition will complement our accelerating internal growth," said Jirka Rysavy, chairman/ceo. "Our focus on media sales, especially our DVD market share, is working. Our successful penetration of specialty retailers, combined with GoodTimes Ent.'s strength in mass market, will create an ideal distribution platform for independent films and other home video titles."
Gaiam's agreement to acquire substantially all of GoodTimes Ent.'s assets for $40 million in cash (subject to certain adjustments) and assumption of certain liabilities is subject to approval of the federal bankruptcy court. Gaiam expects to close the transaction by the end of the third quarter. The acquisition will be financed by existing cash and, if necessary, borrowings under Gaiam's credit facility. Gaiam recently increased its cash position with the sale of Class A unregistered common stock to funds advised by Prentice Capital Management.
More information on the deal will be provided on Gaiam's second quarter conference call, which is scheduled to be held on Aug. 4, 2005. For more general information on Gaiam, visit www.gaiam.com/