Daily News: October 23, 2013

Cinedigm Closes GVE Acquisition

Cinedigm announced it closed the previously announced acquisition of Gaiam entertainment unit, known as GVE, a distributor of home entertainment brands and content, for $51.5 million.

In connection with funding the acquisition, Cinedigm closed on the following financing arrangements: a new $55 million senior secured credit facility arranged and led by Societe Generale Corporate and Investment Banking that includes a $25 million 3-year term loan funded at closing and a $30 million revolving credit facility of which $15 million was drawn at closing; a $5 million subordinated 5-year loan facility; $3 million of restricted Cinedigm stock, of which $1 million was issued to Gaiam as part of the purchase price and $2 million was purchased by an existing shareholder; a $13.0 million underwritten public offering of common stock, inclusive of a $1.5 million over-allotment, with B. Riley & Co., and National Securities Corporation, a wholly owned subsidiary of National Holdings, acting as co-lead managers.

The acquisition and related financings closed on October 21, 2013. Blackstone Advisory Partners L.P. acted as financial advisor to the Company in connection with the acquisition of GVE and Merriman Capital acted as capital markets advisor for the equity offering.

The senior secured credit facility will be at an interest rate of base rate + 3% or the eurodollar rate + 4%, and will mature on October 17, 2016.

The subordinated 5-year loan facility consists of notes with an interest rate of 9% and 5-year warrants to purchase an aggregate of 1.5 million shares of Cinedigm common stock at $1.85 per share.

Cinedigm closed on an underwritten public offering of 4,895,105 shares of common stock, at a price to the public of $1.43 per share and will close on an additional 4,194,885 shares on October 23, 2013. In connection with the offering, B. Riley & Co., and National Securities are acting as underwriters, with B. Riley & Co., acting as the representative.

The company plans to use $40 million from the credit facility, $5 million from the loan facility and the approximately $10.4 million net proceeds from both closings of the underwritten offering for working capital, acquisitions and general corporate purposes, including to fund the acquisition of GVE.

Previously on abfjournal, Société Générale Facility Supports Gaiam Unit Sale to Cinedigm, October 18, 2013