Quickflix has abstained from acquiring a Chinese content company owing to Chinese regulations which was accentuated through due diligence. The video streaming company had announced this non-binding acquisition agreement with a Shanghai-based film and television production company on 5 August.
“Based on due diligence of the Shanghai-based company and advice received in relation to Chinese regulations and restrictions, Quickflix has decided that it will not be proceeding with an acquisition,” said the company in a statement issued to Australian Securities Exchange on 25 August.
The company further added, “Quickflix recognises distribution of content into China and of Chinese content to the rest of the world is a significant opportunity and it is continuing to develop a China strategy. Quickflix is also pursuing opportunities for licensing and operating its studio-accredited streaming platform as a branded or white-label service in other international markets.”
Through this deal, Quickflix intended to aggressively tap international video market apart from Australia and China and thereby enhance its subscriber base. It also anticipated to improve its financial outlook and ability to access further capital for growth through this deal. “The Shanghai-based company is profitable and generates free cash flow. Consolidation with Quickflix would result in the combined entity having a significantly improved financial outlook and ability to access further capital for growth,” Quickflix had mentioned earlier.
Quickflix also scrapped its content deal with Presto because Presto had allegedly not met the reseller agreement. This deal was signed in May 2015.
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