News

Canadian theater chain trying to buy digital signage networks company

July 17, 2013

Toronto-based Cineplex Inc. today announced its offer to purchase EK3 Technologies Inc., a London, Ontario-based, digital signage and in-store digital merchandising provider with operations in Canada, the U.S. 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 digital merchandising networks in North America, with networks viewed by more than 1.8 billion shoppers annually, according to the announcement. The company has developed proprietary state-of-the-art technology and patented software, and provides creative content production, media sales and extensive network operations services, which delivers digital merchandising networks that it says are scalable, reliable and secure.

EK3 clients include major retailers such as Tim Hortons, McDonalds, Walmart and 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, 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, and will continue to be led by EK3 President and CEO Nick Prigioniero, the announcement said.

"Cineplex's brand, resources and media sales along with EK3's proprietary technology platform, network management, award-winning creative services and digital merchandising expertise is a powerful combination," said Ellis Jacob, president and CEO of Cineplex Entertainment, in the announcement. "The strengths of CDM and CDN will make us a leader in the indoor digital signage industry and provides a platform for significant growth throughout North America."

According to the announcement, Cineplex's offer is conditional upon acceptance by the holders of 97 percent of EK3's shares. Closing of the transaction will be subject to customary closing conditions and is expected within two to four weeks.

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