Technicolor – a provider of creative services and technology products for the communication, media and entertainment industries – has announced a partial spin-off of its special effects arm, Technicolor Creative Studios (TCS). The company will spin off 65% of TCS shares through a distribution in-kind to Technicolor shareholders, while still retaining ownership of up to 35%. The company says the move will fully refinance its existing debt, expecting an issuance of $336 million. The spin-off is expected to be concluded by Q3 2022, subject shareholder and regulatory approval.
Following the transaction, Technicolor’s two main lines of business will be Connected Home – providing broadband and Android TV technology solutions – and its DVD Services, which offers packaging and supply chains solutions for packaged media (including film, TV and games).
The move comes after the company announced a restructuring of its visual effects brands in January, in which Technicolor brought together its VFX brands MPC Film, MPC Episodic, and Mr. X under the brand Moving Picture Company, and rolled MPC Advertising into sister brand The Mill. Technicolor also sold its postproduction division in April 2021 to Streamland Media for $36.5 million.
Additionally, the company said it received a binding offer to sell its trademark licensing operations for approximately $112 million to “further simplify its structure with the sale of non-core assets, and to increase Technicolor financial flexibility.”
Richard Moat, CEO of Technicolor said, “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”.
Technicolor had said they expect TCS to “continue to grow significantly through 2022” and the division has recently secured several new projects, including work on the upcoming Top Gun: Maverick and Disney’s live action The Little Mermaid.
