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May 21, 2014

Difference Capital continues media investment theme with Thunderbird Films placement


Nick Waddell / Cantech Letter

Difference Capital (TSX:DCF) believes content is king and the publicly listed merchant bank demonstrated its appetite for the media space again today.

Difference this morning announced it had taken $2-million of an oversubscribed $11.5-million financing in Vancouver-based Thunderbird Films. The preferred shares were priced at $2.00 and pay an 8% dividend. The placement was an up round from the December 2012 placement that was priced at $1.25, of which Difference was also a participant.

“We are pleased to increase DCF’s stake in Thunderbird as this investment is a fundamental part of our media investment strategy,” said Difference Capital Executive Vice-Chairman Paul Sparkes. “We are proud to align ourselves with a strong and dynamic team and believe that compelling content is the next big opportunity.”

Founded in 2003, Thunderbird Films owns more than 500 hours of content, including programs such as Intelligence, Endgame, and Da Vinci’s Inquest.

In a recent white paper, Difference Capital Managing Director Tom Astle explained why the company believes so much in the media space, where he says there are “incredible” investment opportunities.

“The first part of our thesis is that even with all this disruption, content continues to remain king and new distribution technologies only serve to enhance its power position – like Kevin Spacey’s “Frank Underwood”, said Astle. Companies like Thunderbird Films and Blue Ant Media are taking advantage of the 50+ big media buyers out there (up from a handful a decade ago).

“…the second part of our thesis is that there is a decade long battle emerging between legacy video providers and new IP-based entrants, and investing in the technology arms dealers will show handsome returns. iPowow and QuickPlay (also DCF investment) , amongst others, are serving to disrupt how established entrants approach the market.

At press time, shares of Difference Capital were up 2.9% to $2.10.