National Mobile Television (NMT), Seattle, and Unitel Video (ASE:UNV), headquartered in New York, announced May 11 that they had reached an agreement in principle for NMT to acquire the mobile TV production assets of Unitel Mobile Video, which maintains offices in Pittsburgh and Burbank, Calif.. The companies will proceed to negotiate a definitive purchase and sale agreement. The transaction is expected to close in June.
Unitel is the parent company of various entities that provide studio and mobile TV facilities, as well as postproduction and special effects services. Unitel CEO Barry Knepper explained that the proceeds from the sale of the mobile unit would be used to erase the majority of the company’s $40 million debt. He commented that the remaining debt would be "manageable." Knepper said the proceeds would also be used to invest in Unitel’s studio and postproduction divisions, which include Hollywood-based commercial post/effects facility Editel/LA.
He was hopeful that that these changes will aid Unitel’s "depressed" stock price. On May 12, the day following the NMT announcement, Unitel hovered around $2 a share. When asked if another Unitel deal might be in the offing, Knepper said Unitel was not in discussions with other potential buyers.
Acknowledging that the mobile unit was once the company’s most profitable unit, Knepper said that upgrading the trucks to component digital or HD-which may be required-was a costly proposition. "We didn’t feel we had the resources to do it," he explained. As for Unitel’s postproduction facilities, he said he would upgrade to HD when there is customer demand.