Platinum Equity expands entertainment portfolio with acquisition of deluxe entertainment’s distribution business

Firm recruits former CEO Cyril Drabinsky to return and lead business at a pivotal time for an industry disrupted by Coronavirus

On July 1, 2020, Platinum Equity announced the acquisition of Deluxe Entertainment Services Inc.’s distribution business (“Deluxe”). Financial terms were not disclosed and Deluxe Entertainment’s creative businesses are not included in the acquisition.

Former Deluxe CEO Cyril Drabinsky, who left the company in 2016 to establish CineVizion, has now returned to lead the business as CEO under Platinum Equity’s ownership. The transition will also integrate CineVizion’s assets into Deluxe.

Tom Gores, chairmen and CEO of Platinum Equity, emphasized the disruption coronavirus has had on the entertainment industry. He said, “it will take both experiences 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.”

Gores continued, saying Delux has been a cornerstone of the industry for years, and the acquisition is just the beginning: “The company drove the evolution of digital cinema distribution and has continued to reinvent itself in partnership with content creators around the world […] Cyril’s leadership, combined with Platinum’s financial resources and operational expertise, will help the company move forward stronger than ever.”

Mr. Drabinsky was an executive at Deluxe that led the company’s transformation from an analog film processing business into a digital post-production technology and distribution service provider. He stated, “Platinum is an excellent home for Deluxe and this investment represents a strong commitment to our history and to the entertainment industry at a critical time in our business. With [this acquisition], the company will have the support it needs to move into ever more innovative ways to serve the creative community. I am honored that Tom Gores and his team have entrusted me to lead the company that has been such a huge part of my career.”

Former Deluxe executive Mike Gunter is also joining Drabinsky’s team as Chief Financial Officer. Warren Stein, who served as Chief Operating Officer of Deluxe until 2016, has also returned as COO. The Former Deluxe President of Post-production, William Sherak, advised Platinum Equity on the acquisition and will remain in an advisory role going forward.

Deluxe was originally founded as part of the Fox Film Corporation in 1915 as a film processing lab. Today it provides solutions to the world’s leading content production studios and distributors. The company has around 3,400 employees globally with hubs in Los Angeles, Bangalore, London, and Sydney.

The Deluxe and CineVizion deals represent the fourth and fifth buy-side transactions that have been completed in the last four months by Platinum Equity’s Small Cap team. Earlier this week, Platinum Equity announced the acquisition of L&R Distributors. In June, the acquisition of Bond Manufacturing, an add-on to the Orbit Irrigation. In April, the acquisition of Italian winemaker Farnese Vini.

Skadden, Arps, Slate, Meagher & Flom LLP provided legal counsel to Platinum Equity on the acquisitions of Deluxe and CineVizion. Alston & Bird LLP provided legal counsel to Platinum Equity on the financing of the transactions.

Moelis & Company LLC acted as financial advisor to Deluxe Entertainment Services Inc. and Stroock & Stroock & Lavan LLP acted as its legal counsel. Sklar Kirsh provided legal counsel to CineVizion.

About Platinum Equity: Founded in 1995 by Tom Gores, Platinum Equity is a global investment firm with approximately $23 billion of assets under management and a portfolio of approximately 40 operating companies that serve customers worldwide. The firm is currently investing from Platinum Equity Capital Partners V, a $10 billion global buyout fund, and Platinum Equity Small Cap Fund, a $1.5 billion buyout fund focused on investment opportunities in the lower middle market. Platinum Equity specializes in mergers, acquisitions and operations – a trademarked strategy it calls M&A&O – acquiring and operating companies in a broad range of business markets, including manufacturing, distribution, transportation and logistics, equipment rental, metal services, media and entertainment, technology, telecommunications and other industries. Over the past 25 years Platinum Equity has completed more than 250 acquisitions.

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