Struggling Australian SVOD platform Quickflix is planning to acquire an unnamed Chinese content company.
The non-binding memorandum of understanding announced to the Australia Securities Exchange on Wednesday is part of a plan to turn around the fortunes of the streaming company.
Quickflix said it would combine its assets with the Shanghai-based company to “form a global streaming platform for distribution of Chinese film and TV content into China and international markets”.
According to Quickflix, the company in question produces Chinese-language film and television, participates in coproductions in China and internationally, and has a slate of original of future productions, including a coproduction with a US studio.
The firm is “profitable and generates free cash-flow” and the consolidation of the companies “would result in the combined entity having a significantly improved financial outlook and ability to access further capital for growth”.
“Combining the Quickflix platform, with original content and accessing large global audiences represents a significant opportunity to unlock the value of Quickflix,” the firm said in its statement.
The move comes as Quickflix continues to shed subscribers to Netflix and other new rivals such as Presto.
The China announcement cam a day after the firm revealed a deal that would allow its users to access content from Presto had been terminated as conditions of the agreement had not been met.
“Quickflix is pursuing other opportunities in relation to content for its SVOD service including integrating alternative third party SVOD channels into its platform,” the firm said in a separate ASX release.
The China deal will complete subject to due diligence and necessary shareholder and regulatory approvals.
Quickflix said it would update the market on or before August 20.