Movie theatre giant Cineplex buys Canada's DDC

In a really interesting move, Canada’s biggest movie theatre chain has agreed to acquire one of the country’s oldest and most respected digital signage services companies, DDC.

(Disclosure: clients and friends, but this was news to me this morning)

Says the release:

Canada’s movie exhibitor Cineplex Entertainment LP, which is owned by Cineplex Galaxy Income Fund (CGX_u.TO: Quote), said it agreed to acquire DDC Group International Inc and its units for about C$3.5 million ($3.42 million) to boost its digital media business.

The deal is expected to close on or about July 2, Cineplex Entertainment said in a statement.

Toronto-based Cineplex Entertainment owns, leases or has a joint-venture interest in 130 theatres. It operates brands such as Galaxy, Famous Players, Colossus and SilverCity.

Cineplex does extremely well with its pre-show cinema advertising program and has more than two dozen ad sales people selling that network. The company also, a couple of years ago, bought Calgary-based OnSite, giving them screens in arenas and the indoor pedestrian concourses of Toronto and Calgary.

I was wondering if Cineplex was serious about the digital signage space, and this is a really clear signal they are.

DDC founder Stuart Kirkpatrick has been grinding away at the digital signage sector for 14 years, and I have known him for 11 of those. He’s one of the smartest and nicest guys in the sector, and I suspect his company caught Cineplex’s eye because of the quality of the work they do. The company has been winning awards for content and execution the last few years, notably for networks they put in and manage for Rogers Communications and the Air Canada Centre in Toronto. They were one of the first companies to get banks moving, like CIBC and Sun Trust.

They are also the guys behind the digital merchandising unit that Labatt’s and InBev is rolling out pretty much as quickly as they can be made, because of the sales lifts they are seeing on whatever beer is being promoted on the 3G-driven display-fixture.

I spoke with Stuart while he was driving from Toronto to Waterloo to fill in his staff. The deal has been in discussion for several months, but it was all very hush-hush until the release moved this morning.

He said Cineplex has been a customer for 10 years and when the proposition came up, he couldn’t think of any down side. Staff is unaffected and DDC will, in fact, be hiring more bodies. They’ll take over some digital signage operations now handled by Cineplex, and have access to capital, the clout of a much larger and very successful company, and a huge media library for producing content.

Kirkpatrick and DDC people like Steve Harris and Sharon Zehr have been at this forever, trying to get retailers and brands interested way before anyone really knew what digital signage was or why they should care. It’s great to see that amount of hard work, and all that pioneer-days risk, pay off for good people.

Hearty congratulations!