Project Pixel
Premier Digital Production Center with State-of-the-Art Studio and Equipment
Opportunity Overview
“Project Pixel” is the unique combination of a premier tabletop video production firm with a state-of-the-art studio and equipment. The purpose-built studio is tailor-made for food-related shoots, including state-of-the-art kitchen facilities, cine equipment, and multiple stages. The production company's stable of talent - which can be supplemented or replaced by brand-specific directors and food stylists as desired - provides clients with the opportunity to utilize experts in creating visually stunning food content, from social to broadcast, engaging in emotional connections with the audience.
This opportunity allows a client or agency focused on food or other CPGs to embrace the trend of leveraging in-house, captive studios and production. Restaurant brands, holding companies with multiple restaurant brands, agencies serving multiple food-related brands, and private equity funds with a portfolio of food-related brands can capitalize upon this opportunity to significantly reduce costs (or improve margins) by acquiring a turn-key solution to convert to an in-house production facility.
An in-house studio creates opportunities to significantly reduce costs (for an end-user) or improve margins (for an agency) by up to 60% of production billings. It also improves efficiency by saving on freight, shipping, setup/teardown, storage, and other logistics associated with using differing third-party sites. In addition, an in-house studio allows multiple forms of traditional and digital media content to be produced within a single platform.
A partnership with Project Pixel attains all of these benefits immediately through a turn-key solution. The metropolitan area for the studio was carefully selected based on its accessibility, plethora of food and CPG talent, and tax incentives. The extensive processes for creating the studio - from purposeful design that left no detail overlooked to extensive permitting processes and renovations - have been completed, allowing for immediate returns on the studio.
Financial Highlights
- The company has achieved a compound annual growth rate of 50% from 2020 through 2023
- Gross margins approximate 33%, with most production expenses being variable
- Low fixed expenses result in 25% to 30% earnings before interest, taxes, depreciation, and interest (EBITDA) margins and high operating leverage to scale profitability (or cost savings for an in-house studio) as utilization increases
- Company produces over $1.3 million of EBITDA while utilizing less than 25% of capacity
- Opportunities to further increase capacity with minimal additional capital expenditures
- Tax credit incentives provide an opportunity to add another 30% to the bottom line improvement, resulting in a potential cost savings of up to 60% on production billings
- Additional upside potential to continue working with the company's existing client base, depending on the buyer's objectives
Transaction Objectives
The company has experienced significant growth over the last four years and the owners are seeking to partner with a buyer that desires an in-house studio or center of excellence for their portfolio of brands. The proposed transaction would involve a buyer acquiring the combination of the studio and the production company. The owner serving as a director would be available for engagement on a per-shoot basis to assist with continuity as desired by a buyer. The ideal buyer is likely a restaurant brand, an agency with a strong or growing roster of QSR restaurant brands, or a holding company or private equity firm with a portfolio of restaurant brands. A client base or portfolio in consumer packaged goods (CPG) would also be complementary.
Opportunity Highlights
- Up to 60% cost savings or margin improvement on production billings
- Purpose-built studio with every detail tailored to tabletop production with features and capabilities not found in most studios
- State-of-the-art equipment
- Plug-and-play talent that can be utilized on an on-going basis to supplement a buyer's existing resources
- Opportunity for high-volume buyers to generate 50% to 100%+ annual returns on investment (ROI) by acquiring an in-house studio
Next Steps
For more information on Project Pixel, you may contact or schedule a call with Skyline Advisors using the buttons below. To obtain more information on this opportunity immediately, complete the form below to generate a Confidentiality Agreement that you can review and sign electronically. After execution of the CA, you will be invited to join our virtual data room (VDR) to review additional information on this opportunity.