Avi Lerner has officially hung out the “for sale” sign on his distribution shingle Millennium Entertainment after a potential deal to unload the company fell through earlier this year.
Lerner, whose firm Nu Image owns 60% of Millennium, hired boutique investment bank and advisory firm Salem Partners last week to shop the company, a person close to the transaction confirmed. Lerner and his company’s other owners believe Millennium could fetch between $60 million to $75 million, that person said.
Salem Partners, the Los Angeles-based firm which advised Rizvi Traverse on selling its ICM stake last year and Image Entertainment’s merger with RLJ, is expected to begin circulating information on Millennium to potential buyers before next month’s Cannes film festival. The parties hope to complete an acquisition by August.
Millennium’s other owners include New York-based hedge fund Prentice Capital and Exclusive Media, each of which hold a 20% stake. Exclusive bought into Millennium last September, with the idea of eventually buying the entire company.
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But, while the two companies supposedly came close to a deal, talks broke down and a deal never materialized. As Variety reported in October, Exclusive had been attempting to raise between $30 million to $50 million with an eye toward expansion and potential acquisitions.
Salem Partners declined to comment, and officials from Millennium, Exclusive and Prentice Capital were not immediately available for comment.
With a deal with Exclusive now off the table, all three of Millennium’s owners are ready to put the company on the block.
Lerner’s decision to offload Millennium comes as no surprise to many observers as he claims to be more comfortable being a producer than distributor. Sale chatter has surrounded the company for months, as Millennium has fielded interest from potential buyers.
A strategic player – like a foreign sales company, for example – is the most likely buyer, suggests a source familiar with the situation.
Millennium’s roots are in the distribution operations at First Look pictures. The company acquired most of First Look’s assets out of bankruptcy in 2010, along with many of First Look’s key management, including Millennium’s current CEO Bill Lee. Millennium’s executive team is likely to be preserved in a sale, according to one individual familiar with the discussions.
Since the acquisition, that management has built a domestic distribution operation that includes pacts with most major media outlets, including Netflix and iTunes. Millennium’s assets include about 600 films, a significant portion of which are still in their first cycle (although the operating company is seen as more valuable than the library).
The company releases about 20 films a year, and insiders project about $13 million in cash flow in 2013. Millennium has “little debt,” according to one person with knowledge of its finances, and has an operating credit line through Pacific Mercantile Bank.
Millennium Entertainment does not produce its own films and operates separately from Lerner’s production company Millennium Films.
