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JPMorgan Chase to acquire major stake in Technicolor

JPMorgan Chase, which already owns 1% of the media and entertainment company, will increase its stake to as much as 29%.

May 04, 2012|By Richard Verrier, Los Angeles Times

In a move to reduce its debt load, Technicolor said JPMorgan Chase & Co. would acquire as much as a 29% stake in the Paris-based media and entertainment technology company.

Technicolor, which has a large digital services and postproduction operation in Hollywood, said the JPMorgan transaction and a related stock offering would reduce the company's debt by as much as 126 million euros (about $165.7 million), slashing annual debt service payments by 10 million euros ($13.2 million).

"I am delighted that JPMorgan plans to make a substantial investment in Technicolor to become a long-term shareholder in the company," Frederic Rose, chief executive of Technicolor, said in a statement Thursday. "The capital increase we are planning will provide the company with a stronger financial structure and a stable shareholder base to implement its growth strategy."

JPMorgan Chase already has a 1% stake in Technicolor.

"We believe that the company has defined a strategy that will deliver long-term value to Technicolor's shareholders," said David Walsh, managing director at One Equity Partners, a private investment arm of JPMorgan Chase. "We look forward to working closely with management to help it execute this strategy by investing for growth, enhancing market-leading positions and delivering upon its financial objectives."

Technicolor, which reports limited financial results quarterly, recorded revenue of 800 million euros in the first three months of this year, down 1.5% from the same period a year earlier. The company did not disclose profit figures but said it was on track to generate pre-tax earnings of 475 million to 500 million euros this year.

richard.verrier@latimes.com

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