Subscription video on demand player Quickflix has ended its reseller agreement with Presto, announcing its intention to acquire a Chinese film and TV content company to “significantly improve” its financial outlook.
Quickflix inked a deal with Presto in May to distribute Presto's service. An announcement to the ASX yesterday said conditions to the agreement had not been met, and it would therefore be terminated.
Quickflix today announced to the market that it has entered into a non-binding memorandum of understanding with a Shanghai-based film and television company. If the deal goes ahead, Quickflix plans to combine the two businesses and form a global streaming platform for distribution of Chinese content into China and other international markets.
The unnamed company produces original Chinese language film and TV participates in co-production in China and other international markets and has future production in the works, including a deal with a US studio.
Quickflix said the Shanghai-based company is profitable and generates free cash-flow with the acquisition to result in a “significantly improved financial outlook and ability to access further capital for growth” for Quickflix.
In its announcement Quickflix said: “Combining the Quickflix platform with original content and accessing large global audiences presents a significant opportunity to unlock the value of Quickflix.”
The deal is subject to further due diligence as well as shareholder and regulatory approvals. It expects to provide a further update to the market on or before 20 August.
The move could indicate that the streaming market in Asia is heating up, following news that Southeast Asian iFlix landed a $30 million investment ahead of its launch. The business is co-founded by former Mi9 CEO Mark Britt.
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