Prime Focus Merges with Double Negative to Weather Visual Effects Storm
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- June 27, 2014
By James DeRuvo (doddleNEWS)
One thing we haven’t seen up to now is a merger between competing Visual Effects houses in an effort to weather the VFX crisis. But now, Prime Focus, has taken this unprecedented move by joining forces with Visual Effects company Double Negative, and forming one of the largest independent FX companies in Hollywood. Will the tactic work?
"Prime Focus has proven over the last five years the undeniable benefits of global collaboration: the flexibility of working in different time zones; the coming together of creative talent from across the globe; and the ability to leverage tax incentives. We can now bring this together with Double Negative's unquestionable creative excellence to build a truly formidable offering." – Prime Focus Group Announcement
Keeping the brand name Double Negative, the new FX company will be headed up by Prime Focus CEO and founder Namit Malhotra, who will act as Chairman, while Double Negative’s management team Alex Hope and Matthew Holben will stay on as Managing Director and CEO, respectively. Double Negative will also open a new facility in Vancouver, joining the steady influx of FX houses going to the Great White North to court some of Canada’s VFX talent and tax breaks.
"We have ambitious plans to build on what we've achieved in VFX over the last 15 years," said Double Negative's management team of Matthew Holben (CEO) and Alex Hope (Managing Director) in a statement. "This deal allows Double Negative to develop into a truly global operation that provides great work for our clients and great opportunities for our staff."
Malhotra will also oversea Prime Focus’ separate 3D conversion business, which has converted several notable films as Gravity, The Wizard of Oz, The Last Emperor, Harry Potter and the Deathly Hallows: Part 2, Transformers: Dark of the Moon, Star Wars Episode I: The Phantom Menace, The Amazing Spider-Man 2, and Noah. Frankly, I wouldn’t be crowing about Phantom Menace. That conversion was so bad that on its 3D re-release, Disney decided to scuttle the entire 3D conversion of all Star Wars films, and considered the experiment as a dismal failure.
But with Transformers: Age of Extinction and Sin City: A Dame to Kill For coming this summer, it’s already well on its way to redemption. Meanwhile, Double Negative is fresh off its Oscar winning work on Gravity, and more recently Godzilla, is deep in post on Christopher Nolan’s Interstellar, The Wachowski’s Jupiter Ascending, and Hercules, so it’s full steam ahead.
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Press Release:
Double Negative and Prime Focus World Merge Hollywood VFX Business
Combined entity will be the world's largest integrated VFX, 3D Conversion & Animation services company
Prime Focus founder Namit Malhotra to return as Executive Chairman of the Board and Group CEO of Prime Focus Limited
Mumbai June 25, 2014: In an unprecedented move, global media and entertainment industry services leader Prime Focus Limited (BSE code: 532748) has announced the merger of its creative services subsidiary Prime Focus World (PFW) and Double Negative (DNeg), one of the largest visual effects services providers to the global film industry. The agreement will create what is indisputably the world's largest independent VFX, stereo conversion and animation company serving the Hollywood film industry.
"This is a transformational event -- both for the companies involved and for the industry," said Prime Focus founder and CEO of Prime Focus World, Namit Malhotra. "Prime Focus has proven over the last five years the undeniable benefits of global collaboration: the flexibility of working in different time zones; the coming together of creative talent from across the globe; and the ability to leverage tax incentives. We can now bring this together with Double Negative's unquestionable creative excellence to build a truly formidable offering."
Established in 1998, Double Negative is Europe's largest independent VFX house with honors including an Academy Award (for Inception) and two BAFTAs (forInception and Harry Potter and the Deathly Hallows Part 2). The transaction will be supported by Standard Chartered Private Equity, Macquarie Capital and AIDCapital Partners, all existing investors in Prime Focus entities, and existing bankers across the Group.
The new VFX business, which will trade under the 'Double Negative' brand, will be led by DNeg's current management team of Alex Hope (Managing Director) and Matthew Holben (CEO). In addition to the existing creative talent at its London and Singapore facilities, Double Negative will be opening in Vancouver by bringing key talent and technology besides having complete access to all production and technology infrastructure in India.
"We have ambitious plans to build on what we've achieved in VFX over the last 15 years," said Double Negative's management team of Matthew Holben (CEO) and Alex Hope (Managing Director). "This deal allows Double Negative to develop into a truly global operation that provides great work for our clients and great opportunities for our staff."
For Prime Focus the deal offers a clear path to growth where revenues would have more than doubled. With a combined order book of ~US$ 150 mn (INR 900 cr), the company will be in a strong position to sustain growth, generate free cash flows, pare down debt by ~30-40% over the next 4-6 quarters and offer significant value to its stakeholders.
Prime Focus World's highly successful and market leading stereo 3D conversion offering and fast growing animation business will be unaffected by the merger. With over 4000 team members working across US, UK, Canada, China and India, Prime Focus World's award winning stereo conversion process has been used on widely acclaimed films such as Academy Award winners Gravity, The Wizard of OzandThe Last Emperor, as well as some of the highest grossing films of all time, including Harry Potter and the Deathly Hallows: Part 2, Transformers: Dark of the Moon and Star Wars Episode I: The Phantom Menace, The Amazing Spiderman 2 andNoah.
"Our business proposition is already recognized in other industries," concluded Namit who will return to Prime Focus Limited as Executive Chairman of the Board and Group CEO. "The delivery of unmatched creative design and development by the best that the West has to offer, supplemented by the unbeatable infrastructure, scale and cost efficiency of the East. We are establishing a new and sustainable direction for our company, whilst ensuring both growth for our investors and huge financial benefits for our clients. This is a substantive validation of Prime Focus' phenomenal growth story, and marks the beginning of a new trajectory for the company."
Both PFW and DNeg have a power packed summer line up. PFW kick started the season with its work on Maleficent and Edge of Tomorrow. It is also the lead conversion house and a VFX provider onTransformers: Age of Extinction and the exclusive stereo VFX partner on Sin City: A Dame To Kill For. PFWis involved in almost half of all releases from the mainstream studios this summer. DNeg has delivered stunning visual effects for high-profile blockbusters such as Godzilla, Christopher Nolan's Interstellar, Jupiter Ascendingfrom Andy and Lana Wachowski, Ridley Scott's Exodus: Gods and Kings, and Brett Ratner's Hercules, among others.
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