Technicolor SA said it plans to buy the North American disc manufacturing and distribution assets of troubled Cinram Group Inc. for $38.4 million to $43.8 million.
With Cinram exiting the market, Technicolor and Sony Digital Audio Disc Corp. will remain as the only major replicators of discs for the Hollywood movie studios.
The acquisition will support Technicolor's pending assumption of contracts from two large U.S. studios for replication and distribution of their packaged optical media products in North America. The contracts would add more than $200 million in annualized sales to Technicolor's entertainment services segment.
The deals may close in November, contingent on consents and conditions.
Cinram's website says the Toronto-based firm offers packaging, distribution, demand planning and optical disc manufacturing solutions from 20 facilities in North America and Europe. It was not disclosed how many of those locations Technicolor might acquire.
Based in the Paris commune of Issy-les-Moulineaux, Technicolor employs about 14,000 and, for the nine months ended Sept. 30, reported sales of $2.76 billion, up from $2.54 billion for the comparable year-earlier period.
Technicolor manufactured 660.9 million standard-definition-DVD units and 172.3 million Blu-ray units during those nine months.
In a critical loss for Cinram, Warner Bros. Entertainment Inc. moved its DVD and Blu-ray replication work to Technicolor in early 2010.
Investment firm Najafi Cos. of Phoenix purchased Cinram for about $80 million in September 2012. Subsequently, Cinram purchased HTC Corp.'s Saffron Digital Ltd. online services for $47 million in September 2013 and the video game software division of JVC Americas Corp. in May 2014.
During 2015, Cinram sold other assets and added range.
Isidore Philosophe and Samuel Sokoloff formed Cinram in 1969, initially in Montreal and, within a decade, in a move to Toronto. Cinram, an acronym for cinema, radio and music, became a major reproducer of prerecorded music and video and, in recent years, has evolved into more of a global third-party supply chain solutions provider.