Sony Pictures Entertainment has reportedly hired Houlihan Lokey Howard & Zukin to explore the possible sale of its animation studio and special effects unit, The New York Times reports. The Times story estimated that the two units are worth about $500 million combined, which would amount to a $100 million gain on Sony's $400 million, 15-year investment in starting the units.
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Of potential buyers, the Times wrote:
Potential buyers of Imageworks, people involved in the talks said, include investors who believe the company could expand by getting into the production of computer games and television advertisements, which rely heavily on the kinds of effects the company has become known for. But Sony is likely to seek one transaction with an investor in both Imageworks and the animation side, given the degree to which the two businesses are intertwined.
Since Sony seems to want to keep a stake in the business, it would suggest rival animation and effects businesses like George Lucas' Industrial Light & Magic, Peter Jackson's Weta Digital Ltd., Walt Disney Co.'s Pixar and rival DreamWorks Animation SKG Inc. may stay away from the auction, giving outsiders like private equity firms an upper hand. Sounds like Bono's buyout firm Elevation Partners might be an ideal candidate having recently sold VG Holding Corp., the parent of video game developers BioWare and Pandemic, to Electronic Arts Inc. for $860 million. The experience owning VG may give it the insight necessary to helping Imageworks expand into game development.
Sony's five-year-old animation studio recently produced "Surf's Up" and "Open Season," and Sony's special effects department has assisted the production of "Spider-Man," "Stuart Little" and "Polar Express." — Matthew Wurtzel
See story from The New York Times
See story about Elevation Partners from TheDeal.com
