Kew Media acquires Sienna Films for $3-million
Kew Media Group Inc. has acquired Sienna Films. Kew paid $2.58-million in cash and $420,000 worth of Class B shares, with up to $3-million in additional payments contingent upon Sienna’s financial performance.
KEW MEDIA Group Inc. has acquired Sienna Films Inc., an established Torontobased production company.
Sienna, founded by celebrated producers Jennifer Kawaja and Julia Sereny, brings an impressive and diverse production slate to Kew, as well as a robust development pipeline. Sienna is known for scripted television series with international appeal including Cardinal (now in production on season 2 and 3 — aired on CTV in Canada, Hulu in the United States and BBC4 in the United Kingdom); Ransom (now in production on season 2 — aired on Global Television in Canada and CBS in the U.S.); Combat Hospital (for Global Television in Canada and ABC in the U.S.); and Diamonds (for CBC in Canada and ABC in the U.S.) As well, Sienna is known for critically acclaimed and award-winning feature films including Touch of Pink (Sony) and How She Move (Paramount).
This acquisition, Kew’s second since its qualifying acquisition in March, 2017, marks the company’s entry into the production of scripted programming, and represents a highly complementary and strategic addition to Kew’s asset base. Sienna introduces a strong new mix of content into the company, laying a solid foundation for continued scripted growth. The acquisition is expected to be accretive to Kew’s earnings over the next 12 months.
Kew Media paid consideration on closing of $3-million for Sienna, comprising $2.58-million in cash and $420,000 in Class B shares, representing a multiple of 2.7 times estimated annual trailing adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $1.1-million.
The Sienna vendors can earn up to an additional $3-million in contingent consideration based on Sienna’s adjusted EBITDA in 2017, 2018 and 2019. The Sienna vendors can earn (a) $600,000 of the contingent consideration if the fiscal year 2017 adjusted EBITDA is a minimum of $1.1-million (representing a multiple of 3.3 times) (b) an additional $1.2-million of the contingent consideration if the combined adjusted EBITDA for fiscal year 2017 and fiscal year 2018 is $2.42-million (representing an average multiple of four times) or fiscal year 2018 adjusted EBITDA exceeds $1.32-million (representing a multiple of 3.6 times fiscal year 2018’s adjusted EBITDA) (c) a further $1.2-million if the adjusted EBITDA for fiscal year 2019 exceeds $1.58-million (representing a multiple of 3.8 times fiscal year 2019’s adjusted EBITDA ). If any of the contingent consideration payments in either (a), (b) or (c) above are not achieved and the combined adjusted EBITDA for FY 2017, FY 2018 and FY 2019 is a minimum of $4,004,000, the Sienna vendors would be entitled to the full $3-million contingent consideration less any amounts paid in FY 2017 and FY 2018 (representing an average multiple of 4.5 times). The above multiples would be reduced if Sienna exceeds the minimum EBITDA targets.
“Jennifer and Julia have built an exceptional company through creative and innovative work and have proven time and again the ability to develop and deliver quality content,” said Kew’s chief executive officer, Steven Silver. “We welcome these two truly great professionals into our group.”
“As independent content producers who have devoted our careers to compelling and meaningful stories for a range of audiences, the opportunity to be part of Kew Media’s strong international platform is extremely exciting,” said Sienna’s co-founders Ms. Kawaja and Ms. Sereny.
About Kew Media Group Inc.
Kew Media Group is a leading publicly listed content company that produces and distributes multigenre content worldwide. Companies included in the Kew family are the production companies: Architect Films, Bristow Global Media, Campfire Film & Television, Collins Avenue Productions, Frantic Films, Jigsaw Productions, Media Headquarters, Our House Media and Spirit Digital Media; and the distribution companies Content Media Corp. (now rebranded Kew Media) and TCB Media Rights.
We seek Safe Harbor.
Sarah Caroline Curran, David Alexander Fleck, Maurice Kagan, Wayne Purboo, Leslie Wayne Sherman, Steven Silver, Peter A Sussman, Neil Tabatznik, Nancy Tellem
(KEW) Shares: 12,011,501