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Navarre Corporation Announces Sale of FUNimation Entertainment [Archive] - DVD Talk Forum
 
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View Full Version : Navarre Corporation Announces Sale of FUNimation Entertainment


WTK
04-04-11, 05:17 PM
via PR from Navarre... (http://ir.navarre.com/phoenix.zhtml?c=105157&p=irol-newsArticle&ID=1546557&highlight=)
Navarre Corporation Announces Sale of FUNimation Entertainment
Company Advances on Strategic Initiatives and Affirms Debt-Free Status at March 31, 2011

MINNEAPOLIS, Apr 4, 2011 (GlobeNewswire via COMTEX) -- Navarre Corporation (Nasdaq:NAVR) today announced that it has sold FUNimation Entertainment for $24 million in an all cash transaction. Purchasers in the transaction are a group of entities that were newly formed by an investment group that includes Gen Fukunaga, FUNimation Entertainment's chief executive officer, as a minority stakeholder. In connection with the sale, the Company has entered into an agreement to act as FUNimation Entertainment's exclusive distributor in the United States on a continuing basis, and will also act as FUNimation Entertainment's logistics and fulfillment services provider.

The transaction is a major step forward in the Company's ongoing strategy to focus on the expansion of revenue in the distribution of new product lines, further develop the breadth of its value added services, and continue to grow its direct to consumer fulfillment services. This strategy has already resulted in a significant reduction to debt and has improved operating margins by leveraging the Company's significant distribution and logistics expertise and considerable systems and physical assets.

"We ended fiscal 2011 debt free, prior to our receipt of the proceeds from this transaction," said Cary L. Deacon, chief executive officer of Navarre Corporation. "With the strength of our balance sheet, Navarre will be able to deploy the funds generated from the sale of FUNimation to build or acquire new businesses and services to diversify our revenue streams that will support our long-term objectives. We will be actively seeking expansion opportunities in the distribution and online/web services area to support our direct to consumer strategies.

"We are energized by the progress we have made, and feel we are now positioned to build our businesses and services offering to support our long-term objectives and increase shareholder value," continued Deacon.

Earlier this year, the Company had detailed the strategies that support its long-term objectives. Going forward, Navarre's strategic initiatives include:

-- Leveraging its state-of-the-art systems and logistics capabilities;
-- Continuing to expand its products and services beyond digitally
downloadable goods;
-- Providing back-end logistics solutions and fulfillment capabilities to
customers and clients;
-- Expanding its direct-to-consumer fulfillment business;
-- Enhancing the business development team to support acquiring new
services and product lines; and
-- Continuing to grow the Canadian business through expanding relationships
with key Canadian retailers.



"This transaction ends a comprehensive sales process undertaken over the last year. As previously discussed, FUNimation's future strategies and associated risks to execute them are not in line with Navarre's strategic direction," said Reid Porter, chief operating officer of Navarre Corporation. "Most importantly, this sale allows us to now provide even greater focus on executing against our long-term strategic objectives."

The Company anticipates that its financial results for the fourth quarter of fiscal year 2011 will be impacted by a non-cash impairment charge resulting from a reduction in the carrying value of FUNimation's net assets, as well as a pre-tax loss upon the sale of FUNimation. The exact amount of the impairment charge and the loss resulting from the sale of FUNimation will be determined in connection with preparing the Company's financial statements for the 2011 fiscal year end but is currently estimated to be approximately $11 million.

As part of the sale, Navarre will remain the exclusive distributor of FUNimation products in the United States. As exclusive distributor, Navarre will leverage its more than 25-year history as a leading distributor for computer software, home entertainment media, consumer electronics and accessories. More information on the sale of FUNimation, as well as updates on the Company's new strategic priorities, will be available in Navarre's fiscal 2011 fourth-quarter and full-year earnings release on June 7, 2011, and subsequent conference call on June 8, 2011. Details regarding that earnings release will be provided shortly. In addition, the Company's Current Report on Form 8-K filed today with the Securities and Exchange Commission describes the FUNimation sale.
via PR from FUNimation...
By now you have likely seen a press release distributed by Navarre Corporation announcing the sale of FUNimation Entertainment.

FUNimation Entertainment is now owned by an investment group led by president and CEO Gen Fukunaga and includes John A. Kuelbs who was then instrumental in selecting Darwin and Doug Deason to join the team.

“We have a great history with Navarre and we thank everyone there for their longstanding support throughout the last five years,” said Gen Fukunaga, president and CEO at FUNimation Entertainment. “It is due to Navarre’s logistical expertise and wide distribution network that we were able to grow our company into the Anime industry’s market share leader. Though it will no longer be our parent company, Navarre will continue to distribute our product and we look forward to working with them for years to come. We are very excited about our new partners all of whom understand our vision and will help us develop our initiatives in physical product, digital entertainment and other growth areas.”
via ANN (http://www.animenewsnetwork.com/news/2011-04-04/navarre-sells-funimation-to-group-with-gen-fukunaga)
FUNimation gave ANN the following statement:

We have a great history with Navarre and we thank everyone there for their longstanding support throughout the last five years," said Gen Fukunaga, president and CEO at FUNimation Entertainment. "It is due to Navarre's logistical expertise and wide distribution network that we were able to grow our company into the Anime industry's market share leader. Though it will no longer be our parent company, Navarre will continue to distribute our product and we look forward to working with them for years to come. We are very excited about our new partners all of whom understand our vision and will help us develop our initiatives in physical product, digital entertainment and other growth areas

zombeaner
04-05-11, 10:49 AM
This sounds like good news. I have an interview pending with Gen sometime in the next few weeks, I bet he's excited about this!

GenPion
04-05-11, 04:11 PM
Weird. My reaction wasn't as positive after reading the press release.

chrisc31
04-05-11, 04:19 PM
I think it would be a good thing for Funimation.

davidh777
04-06-11, 10:36 PM
Yeah, seems positive to have more control over their company. But I'm not a corporate executive.

zombeaner
04-07-11, 11:10 AM
I can understand some trepidation. Some people are noting that FUNi may be a bit more vulnerable to market forces without the larger Navarre Corp behind them. I would think that the increased freedom would make them feel better, though. I have friends that work there, and they said they ended the workday on Monday with a champagne toast, so that sounds hopeful.

wildcatlh
04-07-11, 03:45 PM
Usually (not always, but a significant amount of the time), when you're talking about a company this size, a management takeover is a good thing.