By Business Wire, October 17, 2013, 05:05:00 PM EDT
BOULDER, Colo.--(BUSINESS WIRE)--
Gaiam, Inc. (NASDAQ:GAIA) ("the Company"), a lifestyle media company,
today announced that it has entered into a definitive agreement to sell
its non-branded entertainment media distribution business ("GVE") to
Cinedigm Corp. (NASDAQ:CIDM) for $51.5 million. The sale price also
includes an adjustment for closing net working capital that is expected
to total approximately $5 million to $7 million in additional cash
consideration. The transaction is expected to be consummated next week,
subject to the satisfaction of customary closing conditions. The Company
is retaining all its Gaiam branded media business.
Following the consummation of the transaction, Gaiam will focus on its
two core businesses, the Company's branded health and wellness business,
including Gaiam branded fitness media content and products, which have a
presence in over 40,000 retail doors, as well as the Company's branded
e-commerce platform, and on Gaiam TV, the Company's streaming video
subscription business. Gaiam TV currently provides over 5,000 exclusive
video titles, including films, documentaries and original programming
dedicated to conscious media, personal growth, and spirituality, and has
the world's largest online library of yoga, fitness, and wellness
videos. Gaiam continues to be the leader in U.S. health and wellness
media with an approximate 40% market share over the twelve month period
ended September 30, 2013.
Gaiam intends to utilize the proceeds from the transaction to fully pay
down the outstanding borrowings under its existing credit facility,
which are estimated to be approximately $10 million net of related cash
inflows between the transaction signing and consummation dates, and to
pursue organic and potential acquisition growth initiatives for the
Company's core businesses. The Company does not expect to pay taxes on
the sale, as it intends to utilize a portion of its net operating loss
carry forwards to fully offset any income tax gain.
Lynn Powers, Chief Executive Officer of Gaiam, commented, "Monetizing
the value of our non-branded entertainment media distribution business
reflects our strategic emphasis on pursuing growth in our core health
and wellness and Gaiam TV businesses. Since combining Vivendi
Entertainment with our existing entertainment media distribution
operations in March 2012, we have achieved our goal of growing GVE to
become the leading independent - and second largest overall -
distributor of non-theatrical content in the U.S. by bringing added
scale and operational synergies to the business, making GVE a more
unique, valuable and attractive asset. The value we are realizing from
this transaction represents a good return for our shareholders and
further strengthens our balance sheet and financial flexibility. Our
strong financial profile and targeted business focus favorably positions
the Company to invest its management and financial resources to achieve
growth both organically and through acquisitions within our core
In relation to the sale of GVE to Cinedigm, Ms. Powers, commented,
"Gaiam's entertainment media distribution business has a talented group
of individuals and excellent leadership. The combination of this team
and these entertainment assets under the existing Cinedigm brand and
media distribution operations makes an excellent strategic fit and
provides a solid platform for Cinedigm to continue growing its business
and realize value from the increased scale."
Berenson & Company served as a financial advisor to Gaiam in connection
with the transaction.
The Company will provide more detail about this transaction during its
earnings release call scheduled for November 7, 2013 at 4:30 p.m. ET.
Gaiam, Inc. (NASDAQ:GAIA) is a leading producer and marketer of
lifestyle media and fitness accessories. With a wide distribution
network that following this transaction will consist of over 40,000
retail doors, 15,000 store within stores, 6,000 category management
locations, and e-commerce and digital subscription platforms, Gaiam is
dedicated to providing solutions for healthy and eco-conscious living
and personal transformation. The Company dominates the health and
wellness category and owns the largest library of conscious media. For
more information about Gaiam, please visit www.gaiam.com
or call 1.800.869.3603.
This press release includes forward-looking statements relating to
matters that are not historical facts. Forward-looking statements may be
identified by the use of words such as "expect," "intend," "believe,"
"will," "should" or comparable terminology or by discussions of
strategy. While Gaiam believes its assumptions and expectations
underlying forward-looking statements are reasonable, there can be no
assurance that actual results will not be materially different. Risks
and uncertainties that could cause materially different results include,
among others, introduction of new products and services, completion and
integration of acquisitions, the possibility of negative economic
conditions, and other risks and uncertainties included in Gaiam's
filings with the Securities and Exchange Commission. Gaiam assumes no
duty to update any forward-looking statements.
Source: Gaiam, Inc.