Deals

On-demand video provider Avail-TVN grabs $100M investment

Video serving company Avail-TVN just closed a $100 million funding round. The company offers digital video for cable TV networks.

Avail-TVN specializes in providing on-demand video for cable networks. It works with major TV networks to process and deliver content.

Carlyle Group led the $100 million round, which will be used to acquire UK-based On Demand Group. The full press release is below.

AVAIL-TVN RAISES $100 MILLION OF FINANCING TO FUND GLOBAL EXPANSION AND DOMESTIC SERVICE DEVELOPMENT;
ACQUIRES ON DEMAND GROUP

The Carlyle Group Invests in Leading Global Digital Media Services Company

Reston, Va., (May 21, 2012) – Avail-TVN, the largest global provider of advanced digital video services, today announced that global alternative asset manager The Carlyle Group (NASDAQ: CG) will lead $100 million of new investment funding enabling Avail-TVN to acquire UK-based On Demand Group, a provider of video on demand services to some of the biggest television brands outside of the United States. Carlyle joins existing Avail-TVN investors including Columbia Capital, Valhalla Partners, Novak Biddle and Pioneer Ventures. Equity for the investment comes from two Carlyle funds: Carlyle U.S. Growth Fund III and Carlyle Europe Technology Partners II. Debt funding is provided by Silicon Valley Bank, RBS Citizens, N.A. and Bank of America, N.A. With this investment, Carlyle is now Avail-TVN’s largest investor.

Avail-TVN will use this investment to fund international expansion and the development of new products and services for the company’s global client base of content providers and multichannel video service providers. The first investment from this new financing, the acquisition of On Demand Group from SeaChange International (NASDAQ: SEAC), expands Avail-TVN’s reach to more than 25 countries, serving more than 70 million households globally.  Major markets include North America, the Caribbean, Latin America, Europe, Middle East and Asia.

“Our strategy has been to invest in leading players across the digital media ecosystem and incorporate them into one company to build Avail-TVN into the largest provider of advanced digital video services worldwide,” said Ramu Potarazu, Avail-TVN’s chief executive officer.  “The Carlyle Group’s investment supports that vision, and provides the capital and global network to build upon this foundation both domestically and internationally.  With the integration of On Demand Group, we broaden our capabilities, extend our distribution and are able to further develop monetization opportunities for our customers in the rapidly-changing digital media space.”

“The market opportunity for Avail-TVN continues to grow,” said Phil Herget, Avail-TVN’s chairman.  “With new partners on board and an expanded global reach, the company is poised to capitalize on trends and generate revenue across the video value chain.”

On Demand Group which provides digital media services for some of the biggest television brands outside of the US, will continue to service its customer base of leading broadband, television and mobile service providers.  The company provides transactional video offerings to operators in 20 countries. Merging the two companies brings together a diverse customer base, strong content relationships with leading entertainment and media companies around the globe, highly developed and proven workflow and delivery systems, a wealth of entrepreneurial management talent and the finance and scale to drive aggressive revenue growth. Tony Kelly, CEO at On Demand Group, will now report to Avail-TVN CEO, Ramu Potarazu, and serve as a member of the executive management team.

“We see tremendous revenue value creation opportunities in the global digital media space as technology continues to revolutionize the way consumers access premium video entertainment,” said William Darman, principal, The Carlyle Group.  “Avail-TVN is an innovator helping organizations across the value chain to continue to monetize video content in new ways and this joint investment by The Carlyle Group’s U.S. and European growth funds is testament to the growth prospects we see in this sector over the coming years.”

“With the addition of the On Demand Group, Avail-TVN becomes the largest provider of digital video in the world, reaching more households in more countries than any other company in the space,” said Will Smales, associate director, The Carlyle Group.  “As the digital video market continues to evolve and mature, the company is poised to capitalize on opportunities around the globe.”

Stephens Inc. was an advisor to Avail-TVN on the transaction.

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