Digital Domain Media Group Pursues Strategic Alternatives To Maximize Shareholder Value

Digital Domain Media Group, Inc. (NYSE: DDMG) today clarified remarks regarding shareholder value strategies made during its July 18, 2012, investor call. The company is formally announcing its plans to evaluate a broad range of strategic and financial alternatives to support the company’s growth initiatives and its efforts to maximize shareholder value. DDMG will engage in discussions with various parties that have contacted the company on an unsolicited basis. The company will also work with its investment bankers and advisors to pursue strategies, and develop relationships, with segment-specific capital sources and strategic partners that have a desire to support the growth initiatives and maximize the shareholder value contribution of the company’s specific business segments.

The company will evaluate a variety of alternatives including, but not limited to, a strategic minority investment in the company or in a specific business segment, joint ventures and/or business combinations with strategic partners and industry participants, the sale or spin-off of certain of the company’s assets or operating subsidiaries into publicly traded or privately held corporations, the outright sale of certain of the company’s assets or operating subsidiaries, or the outright sale of the company. DDMG also intends to be responsive to proposals received that seek to maximize the value of major operating subsidiaries through spin-offs into, or combinations with, publicly traded companies listed on major foreign exchanges that reflect the company’s previously announced international expansion plans.

“While we see our businesses as driven and inspired by the fabric of our high-level digital visual effects capability, we do not believe that the market value of our company reflects the sum of its parts,” said John Textor, CEO and chairman of DDMG. “We are pleased to formalize a process to pursue our most attractive strategic alternatives in recognition both of unsolicited expressions of interest as well our own belief that a focus on the opportunities and valuations of our individual business segments may provide a more compelling argument for a greater total company valuation and shareholder value. We continue to believe strongly in a business model that focuses on the pursuit of lucrative new business opportunities that are inspired by our award winning visual effects business. However, it does seem clear that a plan to align capital and strategic partnerships directly with areas of interest and expertise will be more effective in supporting the growth and value of our individual businesses.”

There can be no assurances that any agreement will be reached with respect to a transaction or that a transaction will be consummated as a result of the company’s review of strategic alternatives. The company does not plan to disclose or comment on developments regarding the strategic review process until it is complete or further disclosure is deemed appropriate.

About Digital Domain Media Group

Digital Domain Media Group (DDMG: NYSE) leverages its expertise in digital visual effects (VFX) and computer-generated (CG) animation across a group of interrelated businesses. At its foundation is Digital Domain Productions (DDPI), an award-winning digital production company founded in 1993. This leading provider of visuals has contributed to more than 90 major motion pictures, including Titanic, the Transformers series, Pirates of the Caribbean: At World’s End and TRON: Legacy, hundreds of commercials, and recently created the virtual likeness of rapper Tupac Shakur for Dr. Dre’s show at the Coachella Valley Music Festival. Mothership, a DDPI subsidiary, focuses on creating advertising, entertainment and branded content from concept to completion, across multiple media platforms. DDMG, its work and its employees have been recognized with numerous awards, including seven from the Academy of Motion Picture Arts and Sciences. The company is building on its success in VFX to participate as a co-producer in major productions and is currently co-producing the upcoming live-action sci-fi feature film Ender’s Game, as well as virtual likenesses for Elvis Presley that will be jointly owned by CORE Media Group and DDMG. DDMG also converts two-dimensional (2D) imagery to three-dimensional (3D) imagery and holds key patents in this area. The company is also applying its CG expertise to produce original, family-friendly animated feature films at its subsidiary Tradition Studios. The first movie, The Legend of Tembo, is in pre-production and two more features are in development. The company’s education subsidiary, the Digital Domain Institute, sets a new standard in digital media education through a pioneering public-private partnership with The Florida State University College of Motion Picture Arts. DDMG is expanding its worldwide footprint of the highest quality visual effects and animation at the lowest possible cost through global partnerships in India and China. The company has studios in Los Angeles, San Francisco, Florida, Vancouver, Mumbai and London, and is currently establishing studios in Beijing and Abu Dhabi. http://www.ddmg.co

Copyright Business Wire 2010

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