Cineplex has offered to purchase EK3 Technologies, a London, Ontario-based, in-store digital merchandising provider, with operations in Canada, the United States and other countries.
The initial purchase price is approximately $40 million, subject to certain adjustments to be made at closing, plus a reverse earn-out payment subject to an aggregate maximum purchase price of $78 million for both payments. The reverse earn-out payment will be based on 2015 operating results and will be payable in early 2016 in the event certain targets are achieved.
EK3 designs, installs, manages and consults on some of the largest digital merchandising networks in North America, with networks viewed by more than 1.8 billion shoppers annually. The company has developed proprietary technology and patented software, and provides creative content production, media sales and extensive network operations services, which delivers digital merchandising networks designed to be scalable, reliable and secure.
EK3 clients include major retailers, such as Tim Hortons, McDonalds, Walmart, Target, as well as Canadian financial institutions RBC Financial Group and BMO Financial Group.
The acquisition complements Cineplex's existing digital signage business, Cineplex Digital Media ("CDM"), whose clients include Scotiabank, CIBC, SunTrust, Rogers, Oxford Properties, Brookfield office towers and ONroute, among others.
EK3 will be renamed and operate as Cineplex Digital Networks ("CDN"), and will continue to be led by EK3 President and CEO, Nick Prigioniero.
"Cineplex's brand, resources and media sales along with EK3's proprietary technology platform, network management, creative services and digital merchandising expertise is a powerful combination," said Ellis Jacob, President and CEO, Cineplex Entertainment. "The strengths of CDM and CDN will make us a leader in the indoor digital signage industry and provides a platform for growth throughout North America."