Arius3D Corp. and Masterfile Corporationare pleased to announce that Arius3D has entered into an agreement with the shareholders of Masterfile to purchase, on certain conditions, all of the issued and outstanding securities of Masterfile for a purchase price equal to CDN$21,379,580.
Masterfile, headquartered in Toronto, is one of the world’s largest providers of premium still images in terms of
revenues. Masterfile was created within a subsidiary of the Toronto Sun in 1981 and managed by Steve Pigeon until it was sold by the Toronto Sun to Mr. Pigeon and a consortium of employees and contributing photographers in 1984. Since its founding, Masterfile’s growth has been primarily organic, and today it has approximately 100 employees worldwide.
Set out below is selected financial information from Masterfile’s audited financial statements for each of the fiscal years ended February 28, 2009 and 2010:
FISCAL YEAR |
2010 |
2009 |
|
(in Canadian dollars) |
|
|
|
Revenue |
22,308,000 |
27,495,000 |
|
|
|
Net Income |
1,516,000 |
197,000 |
|
|
|
Total Assets |
10,478,000 |
11,235,000 |
|
|
|
Total Liabilities |
8,311,000 |
10,627,000 |
A decline of approximately $5.2 million in revenue between fiscal years 2010 and 2009 was consistent with overall industry results and is largely attributable to the impact of the world financial crisis. Net income improved by approximately $1.3 million over that same time period despite the revenue decline. Masterfile is only now in a position to benefit from a more normalized business environment, although there continues to be pressure on operating results.
Under the terms of the Share Purchase Agreement, Masterfile has agreed to provide the Company with its audited financial statements for fiscal 2011 prior to closing. With the acquisition of Masterfile, it is believed that the Company will be the only image distributor in the world offering traditional 2D images together with high resolution 3D images produced using Arius3D’s world renowned technologies.
John Wood, the CEO of Arius3D stated “I believe there is a significant opportunity in the 3D market and Masterfile is a great platform to enable Arius3D to take a leadership position in this market. Masterfile is a leading player in the 2D stock photo industry and has profited from the industry’s spectacular growth through more than two decades. Demand for 2D stock photo content is continuing to grow, however, crowd-sourced supply is impacting the business. As a result, combining the unique content of Arius3D with Masterfile has significant potential. Masterfile’s completely redesigned website released in July 2011 is the perfect platform to showcase 3D content on the internet. Users of the new class of consumer computing devices are demanding rich and interactive content, but 2D photographs are not interactive. 3D content provides the solution and we believe the potential growth in demand for 3D content could replicate or exceed that of 2D stock photo content.”
“Since 1999, Arius3D has developed proprietary, patented 3D technologies, capable of producing extraordinarily rich and interactive 3D image content. That content provides the users of the new class of computing devices with a dramatically enhanced experience. The acquisition of Masterfile should enable Arius3D to commercialize its proprietary capabilities profitably and more quickly, with the objective of making the combined company a leader in the 3D segment of our industry.”
Masterfile President, Steve Pigeon adds: “We believe the combination of Arius3D’s unique technology with Masterfile’s skill and experience in acquiring, marketing and licensing creative content globally provides a wonderful opportunity to build a powerful new enterprise that will benefit our clientele, contributing artists and other stakeholders around the world. This promises to be an exciting, challenging and hopefully rewarding adventure for all of us.” Read the rest of this entry »