Image Entertainment sells to big-time film producer

Posted Apr 3rd 2007 10:48AM by Tom Taulli
Filed under: Private Equity

It's not easy being a micro cap company. But, with lots of capital sloshing around, why not just go private?

That's the thinking at Image Entertainment Inc. (NASDAQ: DISK), a licensee and producer of entertainment programming.

David Bergstein has led a group of investors for the deal (one is D.B. Zwirn & Co., which is a hedge fund). He is a film producer and has actually been buying up film distributors lately. The deal is for $4.40 per DISK share and represents a 35% premium over the past 30-day average price.

Image Entertainment has a film library of more than 3,000 DVD titles, as well as about 200 CD titles. The assets attracted the attention of Lions Gate Entertainment Corp. (NYSE: LGF), which made a $4 buyout offer last year. Lionsgate currently owns 19% of Image Entertainment's stock.

In the third quarter, Image Entertainment posted a loss of $3.5 million or $0.16 per share and revenues plunged 38% to $24.4 million.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.

Tags: Buyout, disk, Image Entertainment, ImageEntertainment, lgf