34×118 Holdings Inc., an affiliate of Prana Studios (an American computer animation and visual effects company, based in Los Angeles, with a subsidiary in Mumbai, India), recently won a bankruptcy auction. The company bid just $1.2 million in cash and assumption of up to $17 million in debt in order to acquire Rhythm & Hues Studios Inc. (a visual effect company with headquarters in El Segundo, CA), which recently won the visual-effects Oscar for “Life of Pi”. One of the failed bidders was another Indian player, Prime Focus of Mumbai, which already owns American assets.
Prana Studios was founded in 2003 and is backed by investors such as Anand Mahindra of Mahindra group, Mukesh Ambani of Reliance Industries, and Indian Americans Naren Gupta of Nexus Capital. Allan Soong of Deliotte CRG (a corporate restructuring group) will serve as chief restructuring officer of the new operating company.
According to Anand Mahindra, Mahindra group is delighted to have been early stage investors in Prana Studios. This move will enable them to increase the scale and complexity of their work. Moreover, according to Gupta, the acquisition of Rhythm & Hues will allow Prana Studios to offer an even broader platform to their partners.
What this means
For cash outlay of little more than the price of a home in any upscale Los Angeles neighborhood, a storied FX house has been sold. Indian companies have had other good luck with bottom feeding as in the purchase of undersea cable operator Flag Communications in right after the dot com bust. Don’t look for this to be a trend however. Integrating a creative team is not a trivial task and the Prana team recognizes that
What this means
