BOULDER, Colo. -- New Frontier Media, Inc., a leader in the electronic distribution of adult entertainment, announced the acquisition of MRG Entertainment Inc. and its affiliated companies ("MRG Entertainment").
MRG Entertainment is a producer and distributor of mainstream films and soft erotic features and events. Its titles, which include a library of over 350 hours of content, are distributed on U.S. premium pay TV channels such as Showtime and Cinemax, as well as on pay-per-view channels across a range of cable and satellite distribution platforms. MRG Entertainment also distributes a full range of independently produced motion pictures to markets around the world. "This acquisition expands New Frontier Media's portfolio to the rapidly growing market for softer, erotic content, as well as to the market for erotic event-type content. The combination also gives us a strong, established beachhead in a range of international markets, and provides us a library of content that we can profitably monetize through our extensive distribution networks," said Michael Weiner, Chief Executive Officer of New Frontier Media. "This transaction will be accretive to New Frontier Media's earnings from day one," continued Mr. Weiner. In its most recent 12-month period, MRG Entertainment had revenue of $13.0 million and EBITDA of $4.8 million.
Under the terms of the deal, New Frontier Media will pay a total of $15 million in cash and $5 million of New Frontier Media common stock, as well as a three-year performance incentive of $2 million. The deal is expected to close by the end of the week.
