Technicolor has purchased London-based The Mill, a large visual effects and content creation studio for the advertising industry, for €259 million ($292 million) on a debt-free basis.
Founded in 1990, The Mill has been providing high-end visual effects for both advertising agencies and brands, and has earned in excess of 1,000 industry awards. It has operations in the key markets of London, New York, Los Angeles and Chicago.
According to Technicolor, this acquisition accomplishes many objectives set out in Technicolor’s Drive 2020 strategic roadmap:
· It establishes visual effects and digital creation across all segments of high-end content, including cinema, TV and advertising.
· It reinforces Technicolor’s portfolio of brands, including MPC, Mr. X and Mikros Image servicing a broad range of customers across 10 global locations.
· It brings talent and expertise around emerging technologies such as virtual reality content that will enable Technicolor’s to enhance its technology platform across the entire industry.
· It adds significant financial contribution with a business that has grown revenues at a 16% CAGR since 2009 to reach €135 million in 2014 while delivering EBITDA margins of approximately 20 percent.
· It allows Production Services to better balance its portfolio through increased exposure to advertising and strengthens the financial profile of the Entertainment Services segment. With this acquisition, Production Services accounts for approximately 40 percent of Entertainment Services revenues.
Tim Sarnoff, president of production services and deputy CEO at Technicolor, wrote this about the acquisition in his blog:
“For a company like Technicolor, this phenomenon is a terrific opportunity to focus on our established strengths as a creative technology company and to invest further in the talent and resources that will help drive this evolving definition of artistic and persuasive storytelling. Today’s acquisition of The Mill is aligned to the growing demand for premium content and creation of new consumer experiences.
“The Mill is a leading provider of VFX content creation for the advertising, gaming and music industries. The Mill’s leading position in the global advertising VFX/post-production market aligns to our desire for immediate scale. Their investment in developing and producing content in emerging spaces (they partnered with Google’s Advanced Technology and Projects group on a five-minute live-action virtual reality short film) also complements our company-wide efforts in these technologies. The Mill and their passionate talent are constantly pushing the frontiers of visual narrative, which means they will avidly leverage the technical chops of Technicolor to create new solutions for their clients.
“Equally, The Mill’s push into the content creation space, working closely with agencies to develop and realize their more technically complex ideas and stories, provides Technicolor visibility further upstream in the content creation value chain.
“With this acquisition Technicolor will extend its current position and technology know-how in VFX to rapidly capture further market share within the advertising and branded experience sector.”
To read Sarnoff’s entire blog click here.