Kew Media signaled its growing presence in the global media sector last week with the announcement of its proposed acquisition of a portfolio of companies, including London and LA-based film and TV distribution company Content Media Corporation (CMC) and five Canadian prodcos.
“We think there is a significant opportunity for both acquisitions and organic growth inside Kew and, in fact, it is our intention to drive growth aggressively and rapidly on both fronts,” said Silver on an investor call Feb. 6.
Under the proposed US$80-million deal, announced Feb. 2, Kew will acquire Bristow Global Media (BGM), Architect Films, Frantic Films, Media Headquarters Film and TV and Our House Media, as well as CMC. The transaction is still subject to shareholder approval.
The acquisition is set to bring a library of more than 6,000 hours of content under Kew’s umbrella, including factual and documentary content such as Jigsaw’s acclaimed Netflix culinary series Cooked (pictured), Bristow Global Media’s Hockey Wives, and Our House Media’s Paranormal Survivor.
In the seven months since Kew was listed on the Toronto Stock Exchange, the company has signed 22 non-disclosure agreements with prospective acquisition targets, from which the media co settled on its initial six proposed purchases, said Silver. This, he confirmed, leaves 16 companies in which Kew has an ongoing interest.
In June, Kew became Canada’s sixth special purpose acquisition company (SPAC) to be listed on the Toronto Stock Exchange. A SPAC is a company that raises investment through an IPO, usually with the intention of acquiring an existing, privately held company or companies.
By combining the five Canadian prodcos with the sales infrastructure of CMC, Silver said Kew will be able to leverage the latter’s distribution network to accelerate its content pipeline by bringing additional buyers into the picture. In addition, Kew will be able to greenlight certain productions by providing small distribution advances to projects that may be close to completing financing.
“With the advent of OTT services like Netflix, Amazon, Hulu, and more recently Apple and Facebook, the buying pattern has changed. In order to provide a maximum amount of optionality and choice to subscribers, these buyers are trying to fill shelves, not schedules. They must build those shelves all the time and continually refresh them with new content to maintain growing subscription levels,” said Sussman of the market Kew intends to service.
On the call, Sussman and Silver were clear that the company’s focus is TV production and distribution for the SVOD-driven international marketplace, with no intention at this time to focus on film.
In bringing a number of Canadian companies under the Kew umbrella, Silver said each will likely retain their brand names and continue to operate independently of one another. “One of the things we spoke about when marketing the IPO was our intention to keep the entrepreneurial spirit alive inside our vendors, their founders, and inside Kew itself. And it is not our intention to overly digest those companies or incorporate them into Kew’s brand,” said Silver.
The CEO did, however, hint at potential layoffs as a means of creating cost efficiencies.
“Not all of them need a CFO, not all need the same replicated infrastructure, so there is certainly an ability inside the platform to find a number of efficiencies,” he said.