Beijing, China; Mumbai, India and Venice, Calif.—September 23, 2012— Digital Domain Media Group, Inc. (“DDMG”) (OTCQB: DDMGQ) announced today that a joint venture, led by Galloping Horse America, LLC (“Galloping Horse”), in partnership with Reliance MediaWorks (USA), Inc., (“Galloping Horse – Reliance”) submitted the winning bid to acquire the visual effects, Mothership Media (“Mothership”) and certain other businesses and assets of Digital Domain Productions, Inc. (“Digital Domain”) and subsidiaries for $30.2 million at a September 21, 2012 auction in New York. The sale is subject to execution of an asset purchase agreement and Bankruptcy Court (“Court”) approval, the hearing for which is currently scheduled for Monday, September 24, 2012.
Galloping Horse—Reliance will acquire all assets constituting the businesses of Digital Domain and Mothership — feature film and advertising visual effects, commercial production and virtual humans, studios in California and Vancouver, BC, Canada and a co-production stake in the feature film Ender’s Game. Pursuant to section 363 of the Bankruptcy Code, Galloping Horse – Reliance will acquire these assets free and clear of all claims and encumbrances, with the proceeds going to the bankruptcy estate. The businesses will continue to operate in the normal course of business, with the joint venture assuming ownership upon Court approval.
Ivy Zhong, Vice Chairman and Managing Director of Beijing Galloping Horse Film Co., Ltd., said, “Digital Domain is a legend in the industry, known for its world-class quality of work and creative talent. We are thrilled to have found a partner in Reliance MediaWorks that is as committed as we are to ensuring Digital Domain’s continued excellence and success.”
Venkatesh Roddam, Chief Executive Officer, Film & Media Services, Reliance MediaWorks, said, “We have had a wonderful working relationship with Digital Domain over the years and we could not be happier to take it further through the joint Galloping Horse – Reliance acquisition. We are looking forward to working with Digital Domain employees and customers to make the operation better and stronger.”
Beijing Galloping Horse and Reliance MediaWorks have a combined enterprise value of more than $25 billion, complementary offerings and presence in multiple worldwide geographies strategic to the entertainment industry. Galloping Horse—Reliance gives Digital Domain, a multi-Academy Award®-winning digital production studio long established as a pioneer in high-quality visual effects, strong infrastructure and significant financial support. Galloping Horse America holds a 70% stake with Reliance MediaWorks holding a 30% stake in the Digital Domain joint venture. China eCapital served as the exclusive financial advisor to Galloping Horse and its affiliated parties in this transaction.
“This is a great day for Digital Domain,” said Digital Domain Chief Executive Officer Ed Ulbrich. “Our new partners have incredible strength and reach in the global entertainment marketplace. They are powerful strategic partners that understand our business and our clients’ business. Their support enables us to continue creating the highest quality entertainment and advertising and puts us in the strongest financial position that Digital Domain has ever been in. We are grateful to all of the bidders and couldn’t be more pleased with this outcome.”
As previously announced, Searchlight Capital Partners had submitted a stalking horse bid for the Digital Domain and Mothership assets in the amount of $15 million. Under the Bankruptcy Code DDMG was required to engage in the process of seeking the highest and best bid for these assets in accordance with the bid procedures approved by the Court.
“We are so pleased that the visual effects businesses will be continued under the strong financial and strategic ownership of Galloping Horse and Reliance. This represents a wonderful outcome for the business, its studio and advertiser customers and partners and valued employees, and for the Digital Domain Chapter 11 estate. Many are to be thanked for their incredible efforts to achieve this milestone,” said Mike Katzenstein, DDMG, Chief Restructuring Officer. “I would also like to recognize Searchlight Capital for agreeing to be the stalking horse bidder in the auction. I am certain that their commitment to the company under the most urgent of circumstances, helped save the business and allowed for the robust auction that led to this result.”
DDMG filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware on September 11, 2012 and ancillary relief in Canada, pursuant to the Companies’ Creditors Arrangement Act (CCAA) in the Supreme Court of British Columbia, Vancouver Registry on September 18, 2012.