Convergence has acquired Images Colour Library Limited, (ICL) a UK based image
library for 3.6 million pounds ($5.2 million dollars) and Zephyr Images, Inc. a San
Diego based library for $2.15 million. These acquisitions are a key stage in the
development of GlobalState's image business, Image State.
GlobalState Holdings, through its subsidiaries ImageState, VideoState and
MusicState, provides pre-edited off and online content for the professional user
worldwide. Sheldon Marshall, former CEO of VCG, is Chief Operating Officer of
Convergence and chief executive and president of GlobalState.
ICL is one of the largest independently owned image libraries in the UK with
approximately 300,000 images, of which 78,000 are in digital format. Richard
Robinson and Peter Robinson own 83% of the company that is based in London and
Leeds and has 23 full time employees. It specializes in the rights protected sector
of the industry. In the year ended March 31, 2000, ICL's earnings before interest and
depreciation were approximately 3.05 million pounds ($4.42 million). This included
a $900,000 loan to Zephyr Images, Inc. which will be repaid on completion of the
acquisition. The offices of ICL in London will be the base for GlobalState's
Zephyr is a general image library based in San Diego and is 50% owned by Richard
and Peter Robinson, and 50% by Leo and Melanie Gradinger and other local
management. The company has 200,000 images of which 10,000 are in digital format.
Zephyr operates in the rights protected sector of the industry and its images are
predominantly in the lifestyle, business, concepts, nature and landscape genre. As
of September 30, 2000 Zephyr's earnings before interest and depreciation were
approximately $1.7 million.
Other companies that are part of ImageState include:
In June of 2000 ImageState acquired Adventure Photo & Film for a net
consideration of $2.67 million. It is believed the annual turnover of the company
is approximately $1.3 million. APF is a Ventura, CA photo and film library
specializing in extreme sports such as mountaineering, rock climbing, sky diving,
base-jumping, scuba diving and surfing. The library also has extensive wildlife and
travel imagery. It houses approximately 150,000 still images and hundreds of hours
of film from over 160 of the world's leading adventure photographers and film
makers. They had 10 full time employees at the time of the acquisition.
In late 2000, WestStock and John Foxx images were acquired for an aggregate
total of 8.3 million pounds (approximately $12 million). In the year ended March
31, 2000, WestStock's revenue was $1.1 million. WestStock licenses rights to still
images using both the Rights Protected and Royalty Free strategies and has rights
to approximately one million images.
WestStock was one of the early innovators of the digital delivery of imagery
through CD's and the internet and supplied images for 31 of the first 36 CD's
produced by PhotoDisc. The company has had its own internet site since 1995. In its
last fiscal year WestStock's online sales, before photographer's commissions, was
$579,000, representing approximately 27% of total turnover according to the press
release. (This would indicate that total revenue was about $2.15 million. The
inconsistency with the $1.1 million figure reported above could not be explained at
John Foxx is a Dutch company based in Groningen, Netherlands. It specializes in
Royalty Free still photography and has 5 full time employees. In the year ended
December 31, 1999, John Foxx's revenue before tax amounted to NLG 3.12 million
(approximately $1.3 million).
Following the acquisitions of WestStock and John Foxx, ImageState had over 1 million
images in transparency form and over 40,000 pre-edited images online.
The files of Zephyr and Adventure Photo & Film (APF) will be merged with the files
of WestStock in Seattle. Seattle will become the U.S. headquarters for ImageState,
the still images division of the company. A fully transactional ImageState website
will be launched in April.
MusicState was developed to provide edited rights-cleared music tracks over the
Internet in MP3 format for the professional business user and was launched to a
preliminary market in November 2000. Customers are able to search tracks by genre,
tempo, mood and instrumentation. They can be listened to and purchased online and
downloaded in full broadcast quality for use in advertising, film and other
multi-media applications. MusicState is a 75% owned subsidiary company of
In due course, the Director intends to launch VideoState which will provide an
online library of film footage, accessible for the professional user via the
Internet for research and ordering. Users will search the database by subject or
keyword. The selected film footage will, subject to user bandwidth, either be
downloaded online or delivered off-line in existing tape or CD format. VideoState
already has a footage collection acquired from Adventure Photo and Film, based in
Ventura, CA, which will form the basis of its library when the service is
Sheldon Marshall has an employment agreement for an indefinite term and terminable on 12
months' notice by either party. Mr. Marshall receives a basic salary under this
agreement of 120,000 pounds per annum (approximately $175,000).