New Frontier Media, an electronic distributor of adult entertainment, has acquired softcore and mainstream filmmaker, MRG Entertainment, in a $22 million deal.
“This acquisition expands New Frontier Media’s portfolio to the rapidly growing market for softer, erotic content, as well as to the market for erotic event-type content,” said Michael Weiner, New Frontier’s chief executive.
New Frontier will pay $15 million in cash and $5 million in its common stock as well as an additional $2 million under a three-year performance incentive clause. The deal is scheduled to close by the end of the week.
Los Angeles-based MRG was founded in 1997 by Marc Greenberg and Rich Goldberg.
The company produces and distributes a variety of softcore and mainstream titles such as Indecent Behavior, Kama Sutra and Lady Chatterly Stories which air on premium movie channels such as Showtime and Cinemax.
Altogether, the company’s library includes more than 350 hours of content that has also been featured on direct broadcast satellite television.
New Frontier, which is publicly traded on the Nasdaq stock exchange, operates The Erotic Networks (TEN) which services 89 million households served by cable television, direct broadcast satellite, broadband and wireless services.
New Frontier today also reported a $2.87 million profit on $11.5 million in revenue for the quarter ending Dec. 31, 2005, compared to $2.92 million profit on $12.0 million in revenue for the same period a year earlier.
The company said its pay-per-view service reported a slight decline in revenue during the quarter over the same period last year, going from $6.2 million to $6.1 million due to increased competition and the switch from pay per view channels to video on demand services by some cable operators.
