Industry leader Technicolor has announced that it will spin off its Technicolor Creative Studios, which houses its visual effects business and animation studio. Technicolor will retain a 35 percent stake in TCS, but the other 65 percent of the business will be spun off.
The move will leave the French parent company with two primary lines of business — Connected Home, which provides broadband gateway boxes and set-top boxes; and DVD Services, which provides replication, packaging, and supply chain solutions for packaged media and related products across film, TV, games, and music. Its trademark licensing division will be sold for roughly $112 million to an as-yet-undisclosed buyer.
Technicolor will also refinance its debt by issuing $336 million in mandatory convertible notes. The transactions are expected to be completed by Q3 of this year, pending shareholder and regulatory approvals.
Technicolor previously went through a restructuring in 2020 after filing for bankruptcy. It later sold its signature post-production business to L.A.-based Streamland Media for $36.5 million. At the time, CEO Richard Moat said the sale was part of a “long-term vision” to focus on visual effects and animation.
The company’s latest strategic moves are expected to make Technicolor “more agile” and “increase financial flexibility,” according to Moat, who explained that “after a comprehensive review, we determined that pursuing the partial spin-off of TCS from the Group along with the full refinancing of the existing debt will be the solution that best aligns strategy, value creation, and financial objectives for all of Technicolor’s stakeholders.”
Paris-based Technicolor will remain listed on Euronext Paris, as the newly spun-off division is “expected to continue to grow significantly throughout 2022” following deals for several new projects.
TCS also encompasses The Mill, Mikros Animation, Technicolor Games, and the VFX label MPC Film, which has worked on 1917, Ghostbusters: Afterlife, Cruella, The Martian, West Side Story, Guardians of the Galaxy, and the upcoming tentpole Top Gun: Maverick.