JP Morgan and private equity arm to invest in Technicolor

JPMorgan Chase & Co (NYSE:JPM) and its private equity arm One Equity Partners will invest in an up to EUR158m (USD208m) capital hike at Technicolor SA (EPA:TCH) with the aim of taking a stake of between 25% and 29.96% in the French broadcasting technology and services company, the latter said on Thursday.

The investment by JPMorgan, which already holds 1% in Technicolor, will help the French group improve its balance sheet and give it additional capabilities to implement its growth strategy under the Amplify 2015 plan.

Technicolor’s CEO, Frederic Rose, welcomed the US investment bank as a significant long-term shareholder, saying that the investment showed confidence in the company and its strategy and growth potential.

In turn, David Walsh, managing director at One Equity Partners, said his firm was looking forward to working with Technicolor’s management towards implementing its growth strategy through increasing top market positions and achieving its financial objectives.

Technicolor will use 80% of the cash from the capital hike to reduce debt by between EUR118m and EUR126m. This will increase its financial flexibility and allow it to carry out its Amplify 2015 plan aimed at converting the company into a leader in innovation in media monetisation solutions.

After the deal, the buyer will have two directors in Technicolor’s nine-member board.

The transaction and the board changes are subject to clearance by Technicolor’s shareholders at their meeting on 20 June 2012, as well as regulatory approvals.

JPMorgan will keep the Technicolor shares for at least one year after the acquisition wraps up. The French group announced on Wednesday a board meeting to discuss an offer for a minority stake received from an institutional investor, whose name it did not disclose at the time.

Technicolor, present in Europe, Asia and the Americas, offers services for content creators, digital home products, software service platforms and research and licensing.