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JP Morgan plans to acquire major stake in Technicolor

May 3, 2012 | 12:56 pm

In a move to reduce its debt load, Technicolor said JP Morgan Chase & Co. would acquire as much as a 29% stake in the Paris-based media and entertainment technology company.

Technicolor, which has a large digital services and post-production operation in Hollywood, said the JP Morgan transaction and a related stock offering would reduce the company's debt by as much as 126 million euros, slashing annual debt service payments by 10 million euros.

"I am delighted that JP Morgan plans to make a substantial investment in Technicolor to become a long-term shareholder in the company,'' Frederic Rose, chief executive of Technicolor, said in a statement Thursday. "The capital increase we are planning will provide the company with a stronger financial structure and a stable shareholder base to implement its growth strategy."

JP Morgan Chase already has a 1% stake in Technicolor.

"We believe that the company has defined a strategy that will deliver long-term value to Technicolor's shareholders," said David Walsh, managing director at One Equity Partners, a private investment arm of JP Morgan Chase. "We look forward to working closely with management to help it execute this strategy by investing for growth, enhancing market-leading positions and delivering upon its financial objectives."

Technicolor, which reports limited financial results quarterly, recorded revenues of 800 million euros in the first three months of this year, down 1.5% from the prior year. The company did not disclose profit figures but said it was on track to generate pre-tax earnings of 475 million to 500 million euros this year.


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-- Richard Verrier

Photo: Technicolor's main Hollywood office. Credit: Glenn Koenig / Los Angeles Times