Avail-TVN announced that The Carlyle Group will lead $100 million of new funding, enabling the media-services firm to acquire U.K.-based On Demand Group from SeaChange International for $27 million.
Avail-TVN said it will use the investment to fund international expansion and the development of new products and services for its global customer base. It will use the first investment from the new financing to acquire the On Demand Group, a provider of content acquisition and aggregation services, from SeaChange.
With the On Demand Group, Avail-TVN will expand its reach to more than 25 countries, serving more than 70 million households globally.
With the investment, Carlyle is now Avail-TVN's largest investor. Carlyle joins existing Avail-TVN investors including Columbia Capital, Valhalla Partners, Novak Biddle and Pioneer Ventures. Equity for the investment comes from two Carlyle funds -- Carlyle U.S. Growth Fund III and Carlyle Europe Technology Partners II -- with debt funding provided by Silicon Valley Bank, RBS Citizens, N.A. and Bank of America, N.A.
"Our strategy has been to invest in leading players across the digital media ecosystem and incorporate them into one company to build Avail-TVN into the largest provider of advanced digital video services worldwide," Avail-TVN CEO Ramu Potarazu said in a statement. "The Carlyle Group's investment supports that vision, and provides the capital and global network to build upon this foundation both domestically and internationally. With the integration of On Demand Group, we broaden our capabilities, extend our distribution and are able to further develop monetization opportunities for our customers in the rapidly-changing digital media space."
SeaChange CEO Raghu Rau said the sale of the On Demand Group is part of the "ongoing execution of our strategy to transform SeaChange into a pure-play software company, while generating significant cash for our business and improving shareholder value."
Continued Rau, "As the sale is to a strategic buyer, the combination of Avail-TVN and On Demand Group creates a global media services powerhouse, which also presents a significant customer opportunity for SeaChange."
Carlyle Group principal William Darman commented, "Avail-TVN is an innovator helping organizations across the value chain to continue to monetize video content in new ways and this joint investment by The Carlyle Group's U.S. and European growth funds is testament to the growth prospects we see in this sector over the coming years."
SeaChange acquired U.K.-based On Demand Group Ltd. in 2005. The unit manages content acquisition and aggregation, as well as marketing, programming and other services, that reach more than 6.5 million households. It also provides mobile video services that reach more than 100 million subscribers.
SeaChange has been looking to focus on software for multiscreen video and advertising. Earlier this month, it completed the sale of its broadcast server and storage business -- which has spun off as XOR Media -- to a private investment group.
Stephens Inc. advised Avail-TVN on the transaction.