A wholly-owned affiliate of Prana Studios acquired Rhythm & Hues, following a hearing Friday in U.S. Bankruptcy Court during which Judge Neil Bason approved the winning bid after a two-day auction held at R&H counsel Greenberg Glusker.
According to analysis by The Hollywood Reporter, the deal is valued at $17.8 million, which includes a $1.2 million cash payment, assumption of loan obligations and contractual liabilities.
The winner bidder, 34x118 Holdings, is a new operating company for which Allan Soong of Deliotte will serve as chief restructuring officer and work with R&H’s Lee Berger as president, Erika Burton as co-president, and Gautham Krishnamurthy as CTO.
Prana—an animation and visual effects studio with offices in Los Angeles and Mumbai, India, whose credits include Hoodwinked and work on Tron Legacy —is backed by a group of investors who include Anand Mahindra (Mahindra & Mahindra), Mukesh Ambani (Reliance), Naren Gupta (Nexus Capital), and Ram Shriram (Sherpalo and a Google board member).
R&H—the company behind the majority of the Oscar-winning VFX in Life of Pi--will remain a standalone company, said Jeff Okun, Prana’s senior vp of VFX in a statement. “While remaining a stand-alone company focusing on cutting-edge visual effects and innovative technology, R&H will be complimented by Prana’s world-class long-form animation,” said Okun, who also chairs the Visual Effects Society. “Our complimentary talents and relationships will create a new, best-in-class one-stop boutique provider of digital imagery to clients globally. With the additional support of our strong investor group, we are confident R&H will continue to be the innovative quality leader in our field that they’ve been for 30 years.”
R&H is currently headquartered in El Segundo, with additional facilities in Mumbai & Hyderabad, India; Kuala Lumpur, Malaysia; Vancouver, Canada; and Kaohsiung, Taiwan. The company is working on Fox's Percy Jackson: Sea of Monsters, Universal's R.I.P.D, and Legendary’s Seventh Son.
Prana is currently working on Percy Jackson, and others including Disney’s animated Planes, and the animated Legends of Oz.
“This is a positive outcome to a difficult situation,” Berger said in a statement, “and we are thrilled to be able to put this process behind us. We are grateful for Prana’s support as well as the support of their investor group, and are excited to begin the next chapter of R&H’s history.”
Peter M. Gilhuly of Latham & Watkins', Andrew Walter of Evolution Media Capital, and PJ Shapiro of Ziffren, Brittenham and Branca represented Prana in the negotiations. Brian L. Davidoff of Greenberg Glusker represented Rhythm & Hues.