When Namit Malhotra started Prime Focus in the late 90s, he had one goal in mind-making the company the best in the field of 3D conversion, visual effects and animation services. A decade and a half later, he continues on this mission. Recently, the company was in the news for two back-to-back deals. It also opened a research & development centre in Bangalore under in its technology arm, Prime Focus Technology. Founder and group chief executive Malhotra talks to Urvi Malvania about the journey so far and the way ahead. Edited excerpts:
After a slew of acquisitions in 2006-07, Prime Focus has been focusing on inorganic growth.
When we started in the late 90s, we were a post-production unit. Gradually, the team identified niche areas and, accordingly, developed competencies. Our strategy was to acquire entities in the markets we wanted to explore. Thus, in 2006-07, we went on a shopping spree and bought VTR Plc (2006) and Post Logic Films (2007) in the UK and the US markets, respectively, among other companies. I believe it is the best way to get traction in a new market. We have done it in the past and will continue to do so, as and when the need arises.
There is no denying the fact that in the global market, people are interested in us and are looking at us for consolidation. Our acquisitions have provided us a lot of business intelligence and helped us grow not only in terms of revenue and volumes, but also as a corporate entity. For instance, in China, we have a joint venture with AID Partners. In that country, there is a Chinese way of doing things; you have to abide by it. Our partnership with AID helps us understand that. We are positioned to provide the quality of the West at a cost that better suits the Asian economic sensibility.
You are already present in Europe and Canada. How does the Double Negative merger fit in?
We merged Europe's Double Negative with the Hollywood-facing VFX business of Prime Focus World, our creative services wing, as a step towards breaking into the top three players in the global visual effects business. That is also why the VFX business will now be under the Double Negative brand name.
Double Negative is an established name in the business; we did not want to disrupt that. Often, a change in name causes doubt and confusion among clients. We are happy to let Double Negative lead our VFX business. To that effect, we have shut our VFX division in Vancouver and have handed over the operational reigns to the Double Negative team. If it wants, it could re-interview the staff in that office and get them back on board. The combined revenue of Prime Focus's creative services and Double Negative are more than $200 million. We have worked with Double Negative in the past, for films such as Total Recall and Hercules. We found the companies could merger at the every level fairly seamlessly.
What was the logic behind merging the global film and media service with Reliance Media Works?
For the Double Negative deal, the total amount required upfront was about Rs 240 crore. I was looking for options to raise money in America, when Reliance Media Works approached us and suggested merging both companies' global film and media services businesses. Reliance Media Works is considering exiting all non-core business. It has a commendable set-up in the films and media services segment. So, we decided to go ahead with the deal, raising Rs 240 crore, which was used for the Double Negative merger. In the process, we also secured access to Reliance Media Works properties in India; two of their foreign acquisitions in the past came our way. This gives us a chance to scale up our business in India and abroad.