Kew Media to pursue further acquisitions

There are 16 other potential deals in the works as the media co seeks to tackle TV for an SVOD world.
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Kew Media signaled its presence in the media sector last week with the announcement of its proposed acquisition of a portfolio of companies, including five Canadian prodcos.

And that likely won’t be the end of it, according to Kew CEO Steven Silver, who heads up the company alongside executive chairman Peter Sussman.

“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 on Monday.

Under the proposed transaction, announced last Thursday, Kew will acquire Bristow Global Media (BGM), Architect Films, Frantic Films, Media Headquarters Film and TV and Our House Media, as well as London- and L.A.-based film and TV distribution company Content Media Corporation (CMC). The transaction is still subject to shareholder approval.

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 with which Kew has an ongoing interest. Kew later confirmed to Playback Daily that the 16 companies are not solely Canadian and U.S.-based.

In June of 2016, Kew became Canada’s sixth special purpose acquisition company (SPAC) to be listed on the Toronto Stock Exchange. An SPAC is a company that raises investment through an initial public offering (IPO), usually with the intention of acquiring an existing, privately held company or companies.

By combining these 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.

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