Management buy-out at Madman
Madman Entertainment co-founders and joint managing directors Tim Anderson and Paul Wiegard have agreed on the key terms to buy the theatrical and home entertainment distributor from parent company Funtastic.
In a letter to staff and stakeholders today, they said they expect to close the deal within a few weeks and they are part of a small consortium that's buying the business.
Anderson and Wiegard sold the distributor, which they founded 18 years ago in the bedroom of a share house, to Funtastic in 2006 for $34.5 million.
Funtastic told the Australian Stock Exchange it had received two expressions of interest to buy Madman and while assessing these offers it had discovered the book value of $52 million was far higher than market value. It warned it would take an impairment charge of $22 million-$28 million on the sale.
A management buy-out seemed the most logical outcome. The co-founders said that after thinking about Madman’s role within Funtastic for eight years, they realised “we wanted to keep working with great people and content we love. We realised that we wanted to be owners again.”
Their letter continued, “We are pretty damn chuffed to announce that Funtastic has agreed to sell the business back to us as part of a small consortium that has shared enthusiasm for Madman and the potential it holds.
“We have just now agreed on key terms and entered into an exclusive negotiation period, with the goal of ensuring we are on the same page with all the details and then signing the final sale agreement in a few weeks from now. We believe that this will be the start of an exciting new stage for Madman.”
They also said, “We have been very fortunate that Madman has continued to achieve solid growth, consistent results, and has taken us in some interesting and fun new directions.
"We are also fortunate that we have been respected and allowed to act and feel like owners during this time. We have enjoyed working with a great team, great partners, and most importantly, we continue to be passionate about Madman and the content we represent.
“We know everyone says this, but we really mean it. We are actually kind of geeks.”
As IF has noted, Madman has three Australian films on its upcoming schedule: Ariel Kleiman's Partisan, Michael Petroni's Backtrack and Amiel Courtin-Wilson and Michael Cody's Ruin, release dates to be confirmed.