Creative businesses like Method Studios and Encore not part of global invesetment firm’s purchase.
Global investment firm Platinum Equity today announced the acquisition of Deluxe Entertainment Services’ distribution business. Financial terms were not disclosed. Deluxe’s creative businesses, which include VFX studios Method Studios and Encore, were not part of the transaction; the distribution and creative businesses have been essentially operating independently of one another, with the exception of some internal / corporate overlap, since 2019.
Former Deluxe CEO Cyril Drabinsky, who left the company in 2016 to found CineVizion, is returning to lead the business as CEO under Platinum Equity’s ownership. As part of the transition, CineVizion’s assets will be integrated into Deluxe.
In July 2018, Deluxe acquired the award-winning 300-person VFX studio, Atomic Fiction, founded by Kevin Baillie and Ryan Tudhope. The studio was known for, among other projects, the fantastic, SUV flipping opening chase scene from Tim Miller’s Marvel superhero hit, Deadpool. Earlier that year in February, Method Studios completed its merger with Australian VFX studio Iloura, known for their work on shows like George Miller’s Mad Max: Fury Road. Deluxe acquired Method back in 2010.
According to Tom Gores, chairman and CEO of Platinum Equity, “The entertainment industry, like many others, has been seriously disrupted by the coronavirus crisi. It will take both experience and tenacity to make it through to the other side, but we are confident that good companies with strong fundamentals and capable leadership will not only survive this crisis, but thrive.”
“Deluxe has been a cornerstone of the entertainment industry for more than 100 years,” Gores added. “The company drove the evolution of digital cinema distribution and has continued to reinvent itself in partnership with content creators around the world. At this pivotal time for the industry, Cyril’s leadership, combined with Platinum’s financial resources and operational expertise, will help the company move forward stronger than ever. This is the first of several things to come in this space.”
Drabinsky was an executive at Deluxe for nearly 20 years and led the company’s transformation from an analog film processing business into a leading digital post-production technology and distribution service provider. "Platinum is an excellent home for Deluxe and this investment represents a strong commitment to our history and to the entertainment industry at a critical time in our business,” he said. "With Deluxe as part of the Platinum family, the company will have the support it needs to move into ever more innovative ways to serve the creative community. I am honored that Tom Gores and his team have entrusted me to lead the company that has been such a huge part of my career."
Former Deluxe executive Mike Gunter will join Drabinsky’s leadership team as Chief Financial Officer. Warren Stein, who served as Chief Operating Officer of Deluxe until 2016, is also returning as COO. Former Deluxe President of Post Production William Sherak advised Platinum Equity on the acquisition and will remain in an advisory role with the company going foward.
Founded as a film processing lab in 1915 as part of the Fox Film Corporation, Deluxe provides a full suite of solutions to the world’s leading content production studios and distributors. The company has approximately 3,400 employees globally with key hubs in Los Angeles, Bangalore, London, and Sydney. The company includes four segments: ocalization (subtitling and dubbing); digital cinema (mastering, key generation and distribution to theaters); home entertainment (compression, encoding and authorizing); and fulfillment (encryption, transcoding and distribution of movies and tv content).
Skadden, Arps, Slate, Meagher & Flom LLP provided legal counsel to Platinum Equity on the acquisitions of Deluxe and CineVizion. Alston & Bird LLP provided legal counsel to Platinum Equity on the financing of the transactions. Moelis & Company LLC acted as financial advisor to Deluxe Entertainment Services Inc. and Stroock & Stroock & Lavan LLP acted as its legal counsel. Sklar Kirsh provided legal counsel to CineVizion.
Source: Platinum Equity
Dan Sarto is Publisher and Editor-in-Chief of Animation World Network.