Barco to spin out Cinema division to Joint Venture with CFG, Appotronic, CITICPE

Barco to spin out Cinema division to Joint Venture with CFG, Appotronic, CITICPE Author Topic: Barco to spin out Cinema division to Joint Venture with CFG, Appotronic, CITICPE  (Read 25 times)

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Barco plans to spin out its current cinema related sales, marketing and services functions from its Entertainment division into a new joint venture with China Film Co. Ltd (“CFG”), Appotronics and CITICPE. The joint venture will serve as the dedicated commercialization solutions channel for each company’s products and services for the global cinema market excluding mainland China.

Barco and Appotronics will start cooperating on selling retrofit modules and projection equipment followed by the addition of CITICPE and CFG’s premium movie solutions later in the year. As well as CFG content, and new business models to facilitate the exhibitor’s decision to upgrade to new technologies, including flexible financing options, uptime insurance and operational partnerships, like pay-per-use, to replace the Virtual Print Fees programmes that funded the original digitalisation of Cinema.
 
Barco will serve as a strategic OEM partner for the joint venture, while retaining full ownership of assets and capabilities related to product management, R&D and manufacturing of all cinema projection and image processing technologies.

The partners plan to capitalize the joint venture in the amount of $100 million. Once all partners have entered the joint venture, Barco will own 55% of the joint venture, Appotronics and CFG will each own 20% and CITICPE will own 5%. The financial results of the joint venture will be consolidated into majority chairholder Barco’s financial results.

Wim Buyens, General Manager of Barco’s Entertainment division for the past seven years, will be appointed as CEO of the joint venture.

The joint venture is expected to become effective during the second quarter of 2018 after customary regulatory approvals have been obtained and following consultation with the relevant social and governmental entities.

As for the Chinese market not part of the new Joint Venture, it will stay with an existing Joint Venture. However Barco will reduce its stake to 49%.

Barco has been addressing the Chinese market through BarcoCFG a Joint Venture with China Film. Barco will be reducing its share in that Joint Venture, leaving control to CFG. Under the terms of the agreement Barco will sell 9% of its shares in the BarcoCFG joint venture to CFG in exchange for 175 million RMB, reducing its stake in the joint venture from 58% to 49%. Barco will continue to act as exclusive OEM partner for all projection and image processing technologies of the joint venture.

“The combination of Barco’s technology and China Film Group’s expertise and market access has made meaningful and successful contributions to the development of digital cinema market in China over the past six years, resulting in a current market share of over 50% for Barco Cinema projectors.” said Jan De Witte, CEO of Barco. He adds: “As the market matures in the larger cities and sales begin to shift to smaller tier 3 and 4 cities, we have agreed that China Film Group is best positioned to lead this next phase of development of the Chinese cinema market. As a 49% shareholder, Barco remains fully committed to the joint venture as a technology partner and provider”.

The new ownership structure is also expected to take effect by mid 2018.

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« Last Edit: Mon December 04, 2017, 11:11:44 PM by DCI forum »