Vector Capital takes stake in Technicolor

San Francisco-based technology fund Vector Capital has beaten a rival bid from JPMorgan Chase to become the biggest single shareholder of French electronics and digital technology company Technicolor.

Shareholders at Technicolor’s Annual General Meeting in Paris on Wednesday voted unanimously for the Vector Capital bid.

The deal, worth between €167 million to €191 million ($242 million), will give the company an 18% to 29.9% percent stake in the company, making it be biggest shareholder.

Under the accord, Vector Capital founder and managing partner Alexander Slusky [pictured] and partner David Fishman will sit on Technicolor’s board.

The deal will inject much-needed funds into the Paris-based company which posted net losses of $324 million in 2011 on an annual turnover of $3.45 billion. It reported an overall net debt of $933 million at the end of 2011.

In an interview last week with French business newspaper Les Echos, Slusky said: “Technicolor’s profile corresponds exactly with our investment philosophy. We focus on companies with a strong technology dimension which are in difficulty but which have activities with strong potential.”

“Key among these is its portfolio of patented technology but the group is also a leader in the DVD sector, which is still a profitable sector, as well as in special effects and is developing a number of innovative technologies,” he continued. 

He added Vector Capital was committed to working with Technicolor as a long-term partner.

“The duration of our investments is typically five to seven years. This won’t be different for Technicolor. The only rule is that we at least get our initial investment back,” he said.

Paris-based Technicolor was known as Thomson SA and Thomson Multimedia up until January 2010 when it took the name of its better-known U.S. film technology subsidiary in a global re-branding operation.

The company has its roots in the Compagnie Française Thomson-Houston (CFTH) company founded in 1893 as a Paris-based sister company of General Electric in its early years.

In the 1950s and 1960s, the company developed into France’s main producer of electronic goods, with its activities spanning the consumer, business and defense sectors.

Today, its activities revolve around technology products and services related to the media and entertainment industries, ranging from post-production theatrical films to managing a global network of broadcast studios, to manufacturing home entertainment products such as DVDs and Blu-ray discs.