Gaiam to Use Proceeds of GVE Sale to Pay down Debt, Fund Future

NAI Editing's picture

Release: 2013-10-18 06:15

View Company Page

Gaiam Inc (NASDAQ:GAIA) US lifestyle media company Gaiam Inc (NASDAQ:GAIA) said it plans to use the proceeds from the previously announced sale of its entertainment unit to fully pay down the outstanding borrowings under its existing credit line as well as to fund potential acquisitions to grow core operations.

Earlier, Cinedigm Digital Cinema Corp (NASDAQ:CIDM) said it had agreed to buy Gaiam's GVE non-branded entertainment media distribution business for about USD51.5m (EUR36.7m). According to the vendor, the sale price will also include a net working capital adjustment of between USD5m and USD7m in additional cash amount. Cinedigm plans to fund the transaction with debt, restricted stock and proceeds of an underwritten public offering.

In a separate statement, Gaiam noted that the sale would allow it to pay more attention to its health and wellness activities as well as to streaming video subscription operation Gaiam TV, which represent its two core businesses. Gaiam's branded health and wellness operation includes the firm's branded fitness media content and products as well as its branded e-commerce platform. The Gaiam TV operation offers more than 5,000 video titles including films, documentaries and original programming.

The GVE transaction is anticipated to close next week.