Cineverse Corp. · NASDAQ:CNVS
Cineverse — Cinedigm — Merger or Acquisition (October 2013)
19 slides from Cineverse's merger presentation, Oct 18, 2013
Slide 1: Acquisition of Gaiam, Inc.'s Entertainment Unit
Cinedigm Corporation Acquisition of Gaiam, Inc.’s Entertainment Unit CINEDIGM
Slide 2: Forward-looking statements
Statements included in this presentation, which are not historical in nature, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Act"’). Forward-looking statements include statements that are predictive in nature, which depend upon or refe
Slide 3: Table of Contents
Table of Contents 1. Overview 2. Transaction Rationale and Considerations 3. Pro Forma Financial Summary SciNeDICM
Slide 4: Overview
Overview CINEDIGM
Slide 5: Introduction
Introduction + Cinedigm Corp. (NASDAQ: CIDM), nema services, is seeking to acquire Gaiam, Inc.’s Entertainment Unit (referred to as “GVE”) and a leading distributor of home entertainment brands and content + The combination of Cinedigm and GVE will create the leading independent content distributor
Slide 6: Transaction Overview
Transaction Overview + Targeting acquisition close on October 21% + $51.5 million purchase price, representing a ~ 3.3x multiple based on GVE 2013E EBITDA“) + $48.5 million at close ($47.5 million cash / $1 million restricted stock) + $3.0 million in deferred purchase payments + Raising $40 million
Slide 7: Capitalization Overview
a 2) 3) 4) 5 Capitalization Overview Class A Common Shares Outstanding” 64,177 Share Price” $1.53 Market Capitalization $98,191 New Recourse Debt $40,000 Ee ae retest oes ee aS veered eploymentResidalvaue®™ [nn] Total Enterprise Value ($136,381 Non-Deployment FY 2014E EBITDA $23,050 EV/2014E Non-Dep
Slide 8: Management Overview
Chris McGurk Chairman of the Board & Chief Executive O Adam Mizel Chief Operating Officer & CFO Bill Sondheim President of CEG Management Overview + Bill Sondheim (GVE President who previously worked for Chris McGurk while at Universal / Polygram) will lead the expanded CEG and enhance Cinedigm’s ex
Slide 9: GVE Overview
GVE Overview + GVE is a leading independent dist jutor of branded, non-theatrical entertainment content to both the physical and digital media markets GVE Company Overview > Founded in 2005 and expanded considerably with the March 2012 acquisition of Vivendi Entertainment > Licenses and distributes
Slide 10: Content Partners and Distribution Relationships
Content Partners and Dist GVE distributes content under long-term contracts with leading independent ution Relationships studio partners and maintains direct relationships with top physical and digital retailers and television partners Select Content Partners Televisa a Ea ~ a GEOGRAPHIC 2 ge GVE ma
Slide 11: Transaction Rationale and Considerations
Transaction Rationale and Considerations CINEDIGM 11
Slide 12: Transaction Highlights
Transact on High ghts An acquisition of GVE accelerates edigm’s growth plans and significantly strengthens its competitive position v Creates the leading independent distributor with all platforms and retailers (both physical and D} y Major studio-level market share for non-theatrical business ¥ Dom
Slide 13: Select Transaction Risks
Select Transaction Risks = + All major contracts recently renewed for 2-3 Coenen years and GVE has almost 100% historical renewal rate Vb Market preseures » Downside protection via low acquisition DVD sales among GVE's core value-oriented and collectible product customers likely to decline more slow
Slide 14: US Home Entertainment Trends
US Home Entertainment Trends + The $20bn+ home entertainment market is forecast to grow through 2017, despite projected declines in DVD sales is > Total consumer spending on home entertainment Home Entertainment Revenue passed $20bn In 2012, and is expected to grow to over ($ in millions) (2042-2017
Slide 15: Cinedigm's Multi-channel Digital Footprint
Cinedigm’s Mult! growing digital home entertainment ecosystem CINEDIGM Source: Gaiam & Cinedigm. channel Digital Footprint Broad rights for every business model makes Cinedigm a cri ical partner in all channels of the rapidly Electronic Sell-through 10,600 movies and over 15,000 Wepisodes amazon. Qv
Slide 16: Pro Forma Financial Summary
Pro Forma Financial Summary CINEDIGM 16
Slide 17: Q2 Preliminary Estimated Financial Update
Q2 Preliminary Estimated Financial Update + Based on actuals and re-forecasted estimates, consolidated revenues of $22.0- $23.0 million and EBITDA of $10.0-$11.0 million with non-deployment revenues of $10.0-$11.0 million and EBITDA of $(1.0-1.5) million + First half of FY14 has been a period of bot
Slide 18: Strong Projected Combined Financial Performance
Strong Projected Combined Financial Performance + The combined company is expected to produce strong financial results right out of the box with 2H CEG guidance of $52.0-$54.0 million of revenues and $12.5- $13.5 million of EBITDA + Annualized synergies targeted at $3.4 - $3.8 million + No revenue s
Slide 19: Conclusion
Conclusion The GVE acquisition is expected to be accretive and to provide Cinedigm with the scale, cash flow and flexible debt structure / revolver necessary to support its current growth plans without further equity capital raises + Immediately accretive to shareholders + Financed with prudent leve