We are initiating sponsored research coverage of Medient Studios, Inc. (MDNT) with a $2 short term target based on DCF of a 5 year proforma of 6-8 films per year and average annual $50M EPS fully diluted primarily derived from...
Special Alert: Initiating Coverage on Medient Studios, Inc: The Next Big Thing in Movie Making is Here!
Medient Studios, Inc. (MDNT)
IF you are going to invest $90 million to build the largest movie production studio in the world (outside of Asia) you need a world class pre/post production technology partner...and about $40 million of equipment.
Today Medient Studios, Inc. (MDNT) announced that Prime Focus Limited ('Prime Focus')...one of the world's largest film making technology companies...and Medient Studios, Inc. ('Medient')...currently developing a 1500 acre movie studio/entertainment facility and campus in Effingham County Georgia (in partnership with the State of Georgia and Effingham County )...have entered into a Memorandum of Understanding for Prime Focus and Medient to execute a definitive J/V agreement within 90 days for the provision of state-of-the-art film making equipment, technology and skill transfer by Prime Focus to Medient.
Under the terms of the joint venture, Prime Focus will provide basically the ENTIRE key production and post-production equipment, work flow technologies and skill transfer for the completion of Medient's mega studio project under development in Savannah, Georgia.
Mr. Manu Kumaran, chairman and CEO of Medient estimates that the Prime Focus contribution is worth in excess of $40 million.
Why is this a BIG deal? Well of course for starters Medient is $40 million closer to their movie studio. But there is a LOT more.
#1 With 4500 employees and production facilities worldwide, Prime Focus (www.primefocusworld.com) is a global leader in the visual entertainment services arts providing creative and technical services to the film, broadcast, and advertising market.
In short they provide pre and post-production/ visual effects services and are a major supplier of production equipment to the filmed entertainment industry.
#2 THIS is the technology and production services partner you want IF you are building a world class movie studio. Prime Focus offers a genuine end-to-end solution from pre-production to final delivery -- including visual effects, 2D to 3D conversion, video and audio post production, equipment hire, multi-platform content operations solutions and digital distribution.
Prime Focus also provides a network that combines global cost advantages, resources and talent pool with strong relationships and a deep understanding of the local markets.
The estimated $40 million of pre and post production equipment and services will include:
- Cameras, lighting gear and other production equipment
- Cutting edge full service post production
- Offline and Online Editing, Color Correction and Grading Systems
- Flame & Smoke suites and other post production equipment and software
- State of the art preview theatres with 3D
- Post production sound including mixing theatres
- Complete film and video transfer services
VFX & Animation equipment and services will include:
- Conceptual design, look development, on-set supervision, dynamics, on-location HDRI capture
- 3D animation/CGI, cosmetic enhancement, matte painting, compositing and finishing
#3 With the technology part of the development secured (deal terms to be worked out of course), securing the REST of the initial $90 million Medient plans to invest in the 1500 acre site in Effingham, GA becomes a LOT easier. NOW traditional real estate financing and additional equity funding deals will pencil out and make strong business sense.
(Details under which Medient will develop the site, including its movie studios, entertainment facility and campus, were covered in the MOU signed with Effingham County Industrial Development Authority on March 19, 2013.)
Chairman/CEO Manu Kumaran stated, "This is the next level of firming up a very special relationship that has spanned the lifetime of Medient. Prime Focus has been a great partner of Medient and we are happy and proud that the relationship is progressing further."
Bottom-line: Medient's plan to develop a major low-cost entertainment production facility producing multi-language movies for the world's largest movie markets (North America, China, India and Europe) is $40 million closer to reality this week. Multi-language affordable movie making IS the future of filmed entertainment outside the major studio "tent pole" $100M+ movie system.
The Medient business vision is to create a very low cost production facility in a very low cost-of-living region of the United States that creates a competitive advantage for movie production using the State of Georgia's uncapped 30% tax credit facility. In essence, using the low cost production capacity of Medient's studio and the proceeds from the sale of the 30% GA tax credits, a majority of Medient movies would be PROFITABLE even if the "LOST" money on their entire stream of box office/VOD and DVD sales.
That is the magic.
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Founder and Editor-in-Chief for NBTEquitiesResearch.com. Contributor and Anchor for the Fox News Channel and Fox Business Network 2000-2013. Chairman & CEO of NBT Group, Inc., a boutique private capital investment bank and investor relations organization.
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