September 27, 2005
MAYNARD, Mass. -- SeaChange International, Inc. (Nasdaq: SEAC), one of the world’s leaders in on-demand systems, today announced its acquisition of the remaining 72% of the outstanding capital stock of the On Demand Group Limited (ODG) that it did not previously own. ODG is a London-based aggregator of television content that provides movies and other television programming for on-demand and pay-per-view services throughout Europe, including cable operators ntl and Telewest in the U.K. ODG is also a principal in the recently launched FilmFlex on-demand movie service venture with Sony Pictures and The Walt Disney Company.
SeaChange paid approximately $13.4 million in cash at the closing for the remaining portion of ODG, making it a wholly owned subsidiary of SeaChange. In addition, under earn-out provisions in the purchase agreement, if ODG meets certain annual performance goals over the period through January 31, 2008, SeaChange will pay an additional $9 million (at today’s exchange rate) in contingent consideration, including up to 50% payable in shares of SeaChange Common Stock with the remainder payable in cash. The contingent consideration will be reduced or increased based upon ODG’s actual performance relative to the goals, with the maximum aggregate contingent consideration being approximately $11.4 million. At the time of the transaction the On Demand Group had in excess of $6.0 million cash in its bank account. “The On Demand Group is a significant addition to SeaChange providing a strategic benefit to our on-demand market offering,” said Bill Styslinger, president and CEO, SeaChange International. “We are pleased to be adding ODG's experienced management to our global team which will strengthen our presence in Europe and elsewhere. SeaChange and ODG will be able to provide comprehensive content acquisition and brokering services worldwide, making it easier for service providers to offer and expand their video-on-demand services.”
ODG was formed in 1995 and is privately funded. It is considered a leader in Europe in interactive media service deployment and development, content management and television production. It has provided services in more than 20 countries. In 2002, SeaChange entered into a non-exclusive strategic partnership with ODG to develop video-on-demand opportunities worldwide. ODG has recently worked extensively in supplying a wide range of movies, kids programming, television and music video content and project management services for the successful launch of the ntl on-demand service in January 2005. In 2004, ODG, Sony Pictures, and the Walt Disney Company founded FilmFlex to provide a high-quality movies on-demand service. Since then, FilmFlex was selected by ntl and Telewest to provide their on-demand films offering, together with systems and software from SeaChange. FilmFlex provides content from the libraries of Sony Pictures Television International, Sony Classics, Walt Disney Television International, Warner Brothers, Pathe, MGM, Dreamworks, Hollywood Pictures, Touchstone Pictures, Miramax Film Corporation, Buena Vista International Inc., Paramount Pictures, Columbia Pictures, TriStar, Icon and other sources. With its acquisition of ODG, SeaChange acquires ODG’s interest in FilmFlex.
“We are delighted with the acquisition by SeaChange because it enables us to offer a completely integrated one-stop solution, from server provision and content acquisition, to service development and operating experience for any cable or telco company internationally that is maximising the triple play opportunity of television, internet access, and telephony,” said Tony Kelly, CEO of the On Demand Group Limited.
SeaChange International Inc.
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