Netgem to acquire video storage and digitisation outfits EP and EDS

Technology outfit and B2B2C service provider Netgem is to acquire video storage and digitisation specialists Eclair Préservation (EP) and Eclair Digital Services (EDS).

Mathias Hautefort, CEO Netgem

EP and EDS have a combined portfolio of over 500 clients in France, including producers and broadcasters, whose works they securely store and digitise, including more than two-thirds of France’s film heritage, according to Netgem.

Netgem said the merger of EP and EDS with its French operations will enable it to enhance its offering for audiovisual production, in particular movies, and will reinforce its strategy to be a key value-added intermediary between content publishers and distributors such as telecom operators.

Netgem is also to buy out the minority stakes held by Caisse des Dépôts and Oceinde in Vitis, its French subsidiary, which it says will simplify the Group’s structure and its governance, and enable the implementation of post-acquisition synergies.

The company is spending a total of €7.4 million financed by a €5 million reserved capital increase, subscribed by Caisse des Dépôts for €3 million and Manco, the reference shareholder of the acquired activities alongside J.2.H., for the rest.

New shares will be issues at a price of €1.20, a premium of 12.7% over the price at close of market the day before. The balance of €1.8 million will be financed by the company’s cash and the assumption of €0.6 million in debt from the acquired companies.

Caisse des Dépôts will hold 7% of Netgem’s capital and Manco close to 5%. These two new shareholders will be represented on the board of directors of the company.

The companies aim to complete the operation by the beginning of next month, with a positive impact on earnings from the second half of 2023.

Mathias Hautefort, CEO of the Netgem Group and president of its French subsidiary Vitis, said: “For over 25 years, Netgem has been a key player to accelerate the digital transformation of the video market from a mass market TV-centered service to an increasingly personalised consumer experience across all devices – with a strong focus on films and VOD. This transformation is far from over: video games, virtual reality and artificial intelligence all are new opportunities for an industry that Netgem will continue to support. The acquisitions of EP and EDS, combined with the arrival of prestigious new shareholders, are additional assets in our deployment of the Group’s strategy.”

The latest move by Netgem comes after its sale of French service provider Videofutur to orange affiliate Nordnet in April.