Vista Group has bought US firm Retriever Solutions in a cash-and-share deal worth up to US$6.5 million ($10m) with earnouts.
Retriever plays in a similar area as Vista, offering software for managing cinemas and marketing their wares.
Vista said the deal will put software into more than 200 new sites,strengthening its position in the US, and open opportunities for its new Vista Cloud.
It did not detail the impact on earnings or revenue.
There are two possible lenses through which to view the deal: an industry laid low by the pandemic providing opportunities to buy rivals on the cheap, or a show of faith that movie-going will continue its comeback as Covid restrictions ease.
Vista, naturally, favours the latter narrative.
Leon Newnham, the head of Vista Group's Vista Cinema division, said the deal demonstrates strong belief in the cinema market after pandemic-related disruption.
Streaming services boomed to a collective billion subscribers during the pandemic, with Disney enjoying notable success with its direct-to-consumer offering. Disney+ again exceeded analyst expectations in its most recent quarter, the company said last week, with subs jumping 11.8 million to 129.8 million households. Disney has used its streaming service as a vehicle to stream its catalogue and as a vehicle to sell new-release titles directly to living rooms.
Vista executives have pointed to recovering box office receipts. And they say people are inherently social creatures, which will give multiplexes enduring appeal.
Newnham pushed this reasoning again this morning, saying: "There's nothing quite like going to see a movie where they are meant to be seen – in the theatre, having the whole experience amplified by rows of people around you laughing and reacting at the same time – people have missed that."
Source / NZX
Vista Group's shares plunged during the first wave of Covid lockdowns. The stock recovered strongly before giving up some of its gains as Delta, then Omicron hit, and the broader correction in tech stocks followed. But it is still up 38 per cent over the past year. It closed yesterday at $2.05 for a market cap of $474 million.
Box office receipts in Retriever Solutions' home market of the US have started to recover toward pre-pandemic levels. Source / Comscore
In a December 22 trading update, Vista said it remained on track to achieve its revenue guidance of $95m to $100m for the full year and to be ebitda and cash flow positive over the second half of the year.
Vista made a net loss of $2.6m in the first half, an improvement on its $43m net loss for the first six months of 2020. Revenue was flat at $45m.
Seems like old times. Still / Sony Pictures
The company said positive trends included Hollywood ramping up production again; an increase in outside-of-home activities as countries eased pandemic restrictions - but also a need for more intensive cinema management to accommodate social distancing and other rules that have persisted - and the return of the box office smash with Spider-Man: No Way Home grossing US$260m in its first three days after its December 15 release.
The superhero flick has now grossed US$1.8 billion worldwide, making it the sixth-highest grossing movie of all time.
On Monday, Vista said Wallis Cinema, which operates six theatres around South Australia, had become the first customer for Vista Cloud. No dollar value was put on the deal.
