Gaiam Buys Bankrupt Entertainment Firm

A day after Good Times Entertainment filed for Ch. 11 bankruptcy protection, Broomfield, CO-based multititle cataloger Gaiam signed a definitive agreement to acquire the bankrupt New York-based media company for $40 million in cash. The deal, subject to approval by the bankruptcy court, is expected to close in the third quarter.

A manufacturer/marketer of “healthy living” produces, Gaiam sells direct to consumers via its Harmony, Real Goods, and Living Arts catalogs in addition to selling its products to retailers. The Good Times acquisition serves to enhance Gaiam’s distribution channels by leveraging Good Times’ relationships with big-box retailers such as K-Mart and Sam’s Club and its presence in the direct response television market.

The Good Times DVD library contains approximately 2,000 titles, including wellness franchises such as fitness series “The Firm” and “Tae Bo” and numerous theatrical releases.

With the acquisition, Gaiam expects to generate more than $200 million in annual revenue, distribute 20 million catalogs annually, and have about 7 million direct customers. Gaiam will also become one of the top 10 studios based on overall DVD market share and will have the sixth-largest market share for all nontheatrical DVDs, according to data from Nielsen Videoscan.

This is the second time in two years that Good Times has been sold. In 2003, New York-based private equity firm Quadrangle bought Good Times for $90 million plus $160 million in debt. According to its bankruptcy court filing, Good Times owes more than $100 million to several creditors both secured and unsecured.

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