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Relativity Media raises $250 mn ahead of IPO

MUMBAI: US-based Relativity Media, which has a joint venture with B4U Network in India, has raised $250 million in a fresh round of funding from investment management firm VII Peaks Capital.

The funding comes ahead of its plans for an initial public offering (IPO).

In a statement, VII Peaks’ managing partner and chief investment officer Gurpreet Chandhoke said, “We have executed a deal which will bring significant equity into Relativity ahead of a planned IPO. Relativity is in a better position as a diversified global media company than ever, and it remains under Ryan’s leadership.”

CEO Ryan Kavanaugh, who is reportedly also investing $25 million of his own funds in the Peaks Capital agreement, is the largest shareholder in Relativity. Minority investor Elliot Management sold part of its stake to investor Ron Burkle in 2012, while Dune Capital Partners IV, Steven Mnuchin and Kavanaugh bought out much of Elliott’s stake in 2014. Mnuchin is co-chairman.

Relativity’s films are released through a joint marketing and distribution venture, launched last year by Relativity Media and EuropaCorp, with the latter paying approximately $130 over a six-year time frame for its 50 per cent stake in the joint venture.

Each company directly distributes its own films through the venture. Tommy Gargotta was recently named president of theatrical marketing, reporting to Relativity president Tucker Tooley and EuropaCorp CEO Christophe Lambert.

Relativity also has been active in Asia, striking a series of joint ventures in India with B4U and China, where it has developed various partnerships and joint ventures with China Film Promotion International, Jiangsu Broadcasting Corp and SeedShine Capital.

The $100 million joint venture company floated by Relativity Media LLC and B4U Network in India will soon release their first movie and secure deals to distribute films of international studios in India. The JV plans to annually remake three to five of Relativity Media’s movies in India. The languages being explored are Hindi, Tamil and Telugu.