Qualia Capital, the Los Angeles- and New York-based entertainment investor, has agreed to a reported $100 million (€83 million) deal to acquire Gaylord Films and Rysher Entertainment. The acquisition represents the firm’s inaugural investment since its launch last year.
Gaylord owns such movie titles as “Donnie Darko”, “White Oleander” and “What a Girl Wants”, while the Rysher library includes the rights to movies such as “Kingpin” and the original “Walking Tall”, as well as television titles such as “Nash Bridges” and “Saved by the Bell”.
Both Malin and Schapiro were first recruited to Artisan by Bain Capital, which two years after it acquired its stake in Artisan, sold its interest to Bain spinout Audax Group in 1999. Audax, a couple years later, sold the company to Lions Gate, realising a roughly 5x return on the investment. From Bain’s original investment to Audax’s sale of the company in 2003, Artisan’s revenues more than tripled under the watch of Malin and Schapiro.
Private equity has had a growing taste for entertainment assets in recent years, particularly content plays such as the Gaylord and Rysher deal. Successes such as Artisan and Warner Music Group, which has been a homerun for Thomas H. Lee Partners, Bain Capital and Providence Equity, has led to a number of other copycat deals in the space.
Lehman Brothers Merchant Banking, in January, launched a music catalogue rollup, while UK-based 3i Group has, in the past six months, inked a deal for Indian media company Nimbus Communications and is currently engaged in a heated auction for the publicly held media outfit Chorion. Apax Partners, Spectrum Equity Investors, Dimensional Associates and a number of other firms have also recently made investments in entertainment as well.
Qualia, meanwhile, is focused exclusively on the sector. According to its website, the firm looks to put its capital into new content investments, the financing of new businesses to create and distribute content, individual film projects, and the securitisation of cash flows from intellectual property assets. Qualia will participate in debt transactions, as well as equity.
Calls to the firm were not returned by press time.