EMT buys Canadian DVoD provider

ASX-listed EMT Corporation has bought Canadian digital video-on-demand (DVoD) provider GalaVu in a move aimed at expanding its footprint in British, South African and Caribbean markets.

NSW-based EMT said it had bought GalaVu Entertainment Network for 400,000 Canadian dollars plus 20 million shares, a price that represented “a fraction of its strategic value”.

“The acquisition brings a proprietary range of technology and intellectual property to secure EMT’s position as a direct provider outside its continued position in General Dynamics’ channel,” a company spokeswoman said.

GalaVu generated 5.2 million Canadian dollars in revenue a year, she said.
 
The buyout of GalaVu would strengthen EMT’s channel via GalaVu’s existing relationships with Hollywood studios. EMT specialises in providing in-room entertainment systems to hotels.

Peter Dykes, executive chairman at EMT, said GalaVu had 20 years of experience in the hospitality industry. It had some 30 sales, marketing, operations and research staff based across three offices, he said.

“[GalaVu] proprietary DVoD technology and IP is installed in over 200 hotels and 26,000 rooms across Canada. GalaVu also has key installations in Europe and the Caribbean,” Dykes said.

Brad Schroeder, president at GalaVu, said the EMT buyout would create economies of scale, cost savings and “more efficient” skill sets. It would make a broader product range available via one company, he said.

“The acquisition will unquestionably add value to both parties and produce a new market leading alternative for hotels across the globe,” Schroeder said.

GalaVu conceded in a statement that it had accrued some 40 million Canadian dollars and equity establishing its business across Canada, in parts of the US and the Caribbean since 1996.

Some 25 million Canadian dollars were spent on acquiring systems and equipment installed in hotel rooms and developing and supporting its own technology.

EMT customers were expected to benefit initially from access to GalaVu’s content licences with major content providers and Hollywood studios. Such relationships were difficult to get and would expand EMT’s content offering, the company said.

EMT has claimed that it believes analogue entertainment systems will all but disappear from the hospitality landscape in two or three years.

The service provider also recently acquired Verizon Communications’ hotel entertainment business for US$1.5 million.

Verizon Select Services held a Master Services Agreement to supply to five star hotels worldwide, securing EMT a market footprint covering some 30,000 hotel rooms across Australia, Singapore, North America and Europe, the company said at the time.