Technicolor has acquired The Mill for €259 million (some $290+ million) on a debt-free basis. Robin Shenfield, CEO of The Mill, said that The Mill will continue business as usual with its full creative, production, operations and management teams intact on both sides of the Atlantic.
Founded in 1990, The Mill is a leading visual effects provider for both advertising agencies and brands, and has earned in excess of 1,000 industry awards. It has operations in the key markets of London, New York, Los Angeles and Chicago.
This acquisition accomplishes many objectives set out in Technicolor’s Drive 2020 strategic roadmap: Establishes leadership positions for visual effects and digital creation across all segments of high-end content, including cinema, TV and advertising; reinforces Technicolor’s strong portfolio of brands including MPC, Mr. X and Mikros Image servicing a broad range of customers across 10 global locations; brings significant talent and expertise around emerging technologies such as virtual reality content that will enable Technicolor’s to enhance its technology platform across the entire industry; adds significant financial contribution with a business that has grown revenues at a 16% CAGR (compound annual growth rate) since 2009 to reach €135 million in 2014 while delivering EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) margins of approximately 20%; and allows Production Services to better balance its portfolio through increased exposure to advertising and strengthens the financial profile of the Entertainment Services segment. With this acquisition Production Services accounts for approximately 40% of Technicolor Entertainment Services revenues.
“In acquiring The Mill, we are executing on our Drive 2020 strategic objective of enhancing our market position in visual effects while improving profitability and revenue growth concurrently with accelerating deployment of emerging technologies,” said Technicolor CEO Frederic Rose. “In The Mill, we have found a company that aligns with our focus on excellence in talent, technology and operational performance. It is a perfect fit.”
Shenfield concurred that the fit is perfect, citing Technicolor’s behavior as owner of MPC, Mr. X and Mikros Image, companies which have maintained their autonomy, cultures and philosophical/creative sovereignty. He said that what has made these businesses successful over the years has continued under Technicolor ownership and he expects the same will be the case for The Mill. Shenfield paralleled the relationship to that of a holding company which has multiple ad agencies under its banner–yet all those shops keep on doing what they do best, actively competing in the marketplace, each with its own unique brand.
At the same time, said Shenfield, The Mill over the long haul figures to benefit from Technicolor’s pedigree, resources, knowhow and innovation, all on a scale that will help The Mill to stay in a leadership position as the advertising sector continues to evolve with the advent of experiential and immersive content. He cited as an example of emerging projects a recent short titled HELP directed by Justin Lin (installments 3-6 of The Fast and the Furious movie franchise) who in collaboration with The Mill combined live action and computer graphics in a 360 environment. HELP is part of a series of immersive movies made for the mobile platform for Google’s Advanced Technology and Projects unit.
Shenfield observed that this level of groundbreaking work requires a deep bench of talent, innovation and resources to lean on. Technicolor, he affirmed, offers all those attributes which in the long view can only help The Mill in its efforts to “innovate, experiment and push the envelope. Technicolor has brought a great deal to film, TV and entertainment, and they have a lot of ambition and vision when it also comes to the changing dynamics of the advertising industry. They are excited about what can be accomplished in the advertising space.“
Shenfield added that The Mill and Technicolor have “quietly circled around each other the last few years. We’ve been ‘stalking’ them,” he quipped, adding that the two companies have seen their interests “become more and more aligned in recent years, It’s an ideal fit.”
Founded in London in 1990 by Shenfield and Pat Joseph, The Mill extended its reach stateside in 2002 with the launch of a full-fledged NY studio, then a Los Angeles shop in 2007, and a Chicago operation in 2013.
