Beverly Hills-based Platinum Equity has purchased Burbank-based Deluxe Entertainment Services Inc.'s distribution business. Terms of the transaction were not disclosed.
The entertainment company’s creative businesses were not included in the transaction.
Former Deluxe Chief Executive Cyril Drabinsky, a 20-year company veteran, will return to lead the business under its new ownership. Drabinsky’s digital cinema services business, CineVizion, was also purchased by Platinum Equity and will be integrated into Deluxe as part of the transition, according to the private equity firm.
Deluxe was founded in 1915 as a film lab. The business underwent a Chapter 11 bankruptcy last fall and has roughly 3,400 employees across hubs in Los Angeles; London; Sydney; and Bangalore, India, according to the company.
“Deluxe has been a cornerstone of the entertainment industry for more than 100 years,” Platinum Chairman and Chief Executive Tom Gores said in a statement. “The company drove the evolution of digital cinema distribution and has continued to reinvent itself in partnership with content creators around the world. At this pivotal time for the industry, Cyril's leadership, combined with Platinum's financial resources and operational expertise, will help the company move forward stronger than ever.”
The purchase is the second entertainment industry buy-in for Gores in as many months. In early June, Gores used his investment company, Crescent Drive Media, to purchase an ownership stake in brother Sam Gores’ struggling talent agency, Paradigm.
In his statement on the Deluxe acquisition, Gores indicated that more entertainment deals were on the horizon for Platinum in the near future. The Deluxe purchase, he said, is "the first of several things to come" in the space.
“The entertainment industry, like many others, has been seriously disrupted by the coronavirus crisis,” Gores added. “It will take both experience and tenacity to make it through to the other side, but we are confident that good companies with strong fundamentals and capable leadership will not only survive this crisis, but thrive.”
Finance reporter James B. Cutchin can be reached at firstname.lastname@example.org. Follow him on Twitter @jamesbcutchin.
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