Prime Focus World, the Hollywood-based entertainment services company, has merged with British effects studio Double Negative.
The transatlantic merger is the latest sign of the globalization of Hollywood's visual effects business. It will make the London company a division of Prime Focus World, the creative services subsidiary of Indian conglomerate Prime Focus.
The deal catapults Prime Focus, a second-tier player in the visual effects industry, into what executives said would be the world's largest independent visual effects, 3-D conversion and animation company with more than 4,000 employees.
Double Negative will have a minority ownership in Prime Focus World, which will retain about 80% of shares after the merger. Double Negative Managing Director Alex Hope and Chief Executive Matthew Holben will lead the newly combined operation, which will operate under the Double Negative name.
No financial terms were disclosed.
"This is a transformational event – both for the companies involved and for the industry," Prime Focus World Chief Executive Namit Malhotra said in a statement. "Prime Focus has proven over the last five years the undeniable benefits of global collaboration: the flexibility of working in different time zones; the coming together of creative talent from across the globe; and the ability to leverage tax incentives."
Indeed, the combination will make Prime Focus more competitive with industry leaders such as Disney-owned Industrial Light & Magic, Paris-based Technicolor and Sony Pictures Imageworks, which recently announced plans to relocate its headquarters from Culver City to Vancouver, Canada.
For Double Negative, the merger gives the British company access to Prime Focus' expanding facilities in India, China and Vancouver, where it recently expanded operations to take advantage of film tax breaks.
"We have ambitious plans to build on what we’ve achieved in VFX over the last 15 years," Holben and Hope said in a statement. "This deal allows Double Negative to develop into a truly global operation that provides great work for our clients and great opportunities for our staff."
In an interview, Malhotra said the driving force behind the merger is to give Prime Focus access to one of the industry's premier visual effects companies.
Founded in 1998, Double Negative is highly regarded in Hollywood, where it won an Oscar for its work on the Christopher Nolan movie "Inception." The company is currently work on Nolan's next movie, "Interstellar."
"The visual effects component of our business will be transitioned to Double Negative because that's the company that has the brand and is the top-tier player in the visual effects space," Malhotra said. "They have the best practices and talent, and we're saying very clearly, 'That is their specialty and they should run it.'"
For its part, Prime Focus is primarily known for converting movies into a 3-D format, including the Oscar-winning Warner Bros. film "Gravity." The company also has worked on Disney's "Maleficent," "Noah," "World War Z" as well as several "Star Wars" films.
Prime Focus has been looking to expand its presence in the creating visual effects and was among the bidders last year for Rhythm & Hues when the Los Angeles-based studio emerged from bankruptcy.
Prime Focus has scaled back its workforce in Hollywood, where it currently employs about 40 people, Malhotra said.
In March, Prime Focus' technology subsidiary signed an agreement to acquire DAX, a fast-growing Culver City company that helps major studios manage their digital work flow needs.
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