Gaiam to acquire Good Times Entertainment

Aug 01, 2005 9:30 PM  By

A day after Good Times Entertainment filed for Chapter 11 Bankruptcy Protection in the Southern District of New York on July 11, $96.7 million Broomfield, CO-based manufacturer/marketer Gaiam signed a definitive agreement to acquire the New York-based video and DVD company for $40 million in cash. The deal, subject to approval by the bankruptcy court, is expected to close in the third quarter.

The Good Times library contains approximately 2,000 titles, including wellness franchises such as fitness series The Firm and Tae Bo and children classics such as Benji. Through its Harmony, Real Goods, and Living Arts catalogs, Gaiam sells healthy living/spa products, such as yoga mats, balance balls, and instructional videos and DVDs. Gaiam’s wholesale division supplies retail chains such as Target.

Although the acquisition will considerably beef up Gaiam’s media offerings, the deal was more about enhancing Gaiam’s distribution channels and leveraging Good Times’ relationships with big-box retailers such as K-Mart and Sam’s Club, according to Gaiam spokesperson Christine Lumpkins. Good Times is also strong in the direct response television market.

With Good Times as part of its fold, Gaiam expects to generate more than $200 million in annual revenue; it will have about 7 million direct customers. Gaiam is now among the top 10 studios based on overall DVD market share and will have the sixth-largest market share for all nontheatrical DVDs, according to Nielsen Videoscan data.

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 filing, Good Times owes more than $100 million to several creditors, including $6 million to affiliates of Quadrangle.