Bain Capital to Acquire VDI for $200 Million

VDI MultiMedia, a Los Angeles-based film industry post-production company, on Monday agreed to be acquired by investment firm Bain Capital Inc. in Boston for about $200 million, including assumed debt.

VDI’s common shares would be converted into the right to receive $15 a share in cash. Some shares held by management employees who are staying with the firm and others would be converted into new common stock following the acquisition.

The transaction, which has been approved by VDI’s board, would be financed by Bain and Credit Suisse First Boston, which would arrange an additional $150 million in debt financing. VDI hired Morgan Stanley Dean Witter & Co. in July--when shares fell about 16% from the year earlier--to explore alternatives for increasing the share price.

The firms expect the merger to close in March or April. Donald Stine, president of VDI, would become chief executive of the company. VDI sells editing, reformatting, archiving and distribution services for films and videos.

Bain Capital, a private equity investor, has invested in more than 130 companies since its founding in 1984. It manages more than $7 billion in assets.

VDI’s stock rose $1.44 to close at $13.69 Monday on Nasdaq.

The transaction is the latest evidence of consolidation in the post-production industry, which is dominated by small businesses of fewer than 100 people. Recently, cable company Liberty Media Group agreed to buy Los Angeles-based post-production houses Todd-AO Corp. and Four Media Co.