Animation Studio Rhythm & Hues Acquired By Prana Studios

Academy Award®-winning visual effects and animation studio Rhythm & Hues was acquired out of bankruptcy today by a wholly-owned affiliate of Los Angeles-based Prana Studios, Inc. Rhythm & Hues is a global production powerhouse for the creation of visual effects and animation for Hollywood movies. Among its 145 screen credits are “Life of Pi,” “The Golden Compass” and “Babe,” Academy Award winners for Achievement in Visual Effects, (in 2012, 2008, and 1995 respectively).

“This is a positive outcome to a difficult situation,” said R&H executive Lee Berger, “and we are thrilled to be able to put this process behind us. We are grateful for Prana’s support as well as the support of their investor group, and are excited to begin the next chapter of R&H’s history.

In February at the 85th Academy Awards, Ang Lee’s Life of Pi won 4 Oscars for Cinematography, Directing, Music (Original Score) and Visual Effects. The movie saw a total of 11 nominations. The vfx team included Bill Westenhofer, Guillaume Rocheron, Erik-Jan De Boer, Donald R. Elliott and Rhythm & Hues.

During the press room Q&A at the Dolby Theatre about the fate of the company, here’s what the Oscar winners responded with backstage.

Q. Bill, in light of what’s happened with Rhythm & Hues, are you hopeful that whatever happens that you’ll be able to keep the same culture? And for the other visual effects supervisors, talk about what this means for you being able to work on a project where the visual effects are very much a part of the aesthetic of the movie.

A. (Bill Westenhofer) So the first part of your question about Rhythm & Hues, it really was something special, experience funded by John, Pauline and Keith, and it was a place that really catered to the artist and supported them really well. It is a concern. We’re hopeful that we can pull through the bankruptcy, but it’s a concern in all of our minds that the culture is preserved. As long as the key people are maintained in that environment, I think it will carry on. You guys can talk about the second part of the question.

A.(Guillaume Rocheron) Well, I think LIFE OF PI, as you mentioned, is a perfect example of visual effects contributing to the look of a film. And I think with everything we’re talking about now is it really shows that visual effects is part of filmmaking. And that we’re here, and we contribute to telling stories, making images and, over the years, develop relationships with filmmakers and really trying to be integrated in the filmmaking process as early as possible to give as much as we can to the director and try to make sure he can have his vision on screen. So I think it’s really important thing for me that LIFE OF PI kind of shows, it’s a turning point where we’re not only supplying a service, we’re here to actually tell stories and put them on screen.

R&H is also the recipient of four Scientific and Technical Awards from the Academy of Motion Picture Arts and Sciences (AMPAS). With headquarters in El Segundo, California, and additional facilities in Mumbai & Hyderabad India; Kuala Lumpur, Malaysia; Vancouver, Canada; and Kaohsiung, Taiwan – R&H Films offers filmmakers a dynamic creative resource with a vast array of technology and talent.

At a hearing held today in U.S. Bankruptcy Court in Los Angeles, Judge Neil Bason approved Prana Studios affiliate, 34×118 Holdings Inc., as the winning bidder after a two-day auction. Prana Studios Inc. is a U.S. animation and visual effects studio with offices in Los Angeles and Mumbai, India.

Prana’s current projects include the upcoming “Planes” theatrical release for the Walt Disney Company (Aug 2013), the animated feature film “Legends of Oz” (Spring, 2014 release), “Pourquoi j’ai (pas) mange mon Pere (Pathe 2014), Percy Jackson 2 (20th Century Fox), and “Saving Santa” (Gateway Films 2013).

“Our partnership will allow R&H to continue the business of creating world-class digital imagery,” said Jeffrey A. Okun, Senior Vice-President, VFX, Prana Studios. “While remaining a stand-alone company focusing on cutting-edge visual effects and innovative technology, R&H will be complimented by Prana’s world-class long-form animation. Our complimentary talents and relationships will create a new, best-in-class one-stop boutique provider of digital imagery to clients globally. With the additional support of our strong investor group, we are confident R&H will continue to be the innovative quality leader in our field that they’ve been for 30 years. We are thankful to Universal and Fox for their overwhelming support.”

The company’s assets were acquired from the court by 34×118 Holdings Inc., a Prana Studios affiliate. 34×118 Holdings Inc.is the new operating company. Allan Soong of Deliotte CRG, will serve as Chief Restructuring Officer of the new operating company, and will work with Lee Berger as President, Erika Burton as Co-President, and Gautham Krishnamurthy as CTO to restructure the operations while maintaining the creative expertise which comprises the heart and soul of the R&H brand.

Anand Mahindra, Chairman, Mahindra Group said “We are delighted to have been early-stage investors in Prana Studios. This bold move will make them the animation / VFX leaders with global delivery capability and will substantially increase the scale and complexity of their work.”

Founder of Sherpalo Ventures and Google Board member Ram Shriram said, “I am excited for Prana – the best at full service digital animation, and now digital VFX. This new arrangement allows for a single stop, stable long term solution for all the digital creative needs of the studios.”

Co-founder of Nexus Venture Partners Naren Gupta stated, “Prana’s focus on high-quality animation and VFX is a cost-effective business model that has made us a favorite partner of leading studios around the world. Acquisition of Rhythm & Hues will allow us to offer an even broader platform to our partners. Prana and its founders are continuing to innovate the way high-quality creative activities should be performed. I remain a huge fan of Prana and its management team.”

Peter M. Gilhuly of Latham & Watkins’, Andrew Walter of Evolution Media Capital, and PJ Shapiro of Ziffren, Brittenham and Branca represented Prana Studios Inc. in the negotiations. Brian L. Davidoff of Greenberg Glusker represented Rhythm & Hues.

Prana Studios, Inc. is an artist-driven, full-service 3-D animation and visual effects studio with production offices in Los Angeles, CA, USA and Mumbai, India. The studio develops content and creates state of the art visual imagery for full-length feature animated films, high quality visual effects for live action and hybrid films, short-form media, and special venue attractions. Prana works in collaboration with major Hollywood studios and independent production companies throughout the world. The studio’s creative skills range from visual and story development to final post, including complete CG and stereoscopic animation and image creation. Prana is a U.S. company founded in 2003 by Arish Fyzee, Kristin Dornig and Pankaj Gunsagar, and is backed by an outstanding group of investors who include Anand Mahindra (Mahindra & Mahindra), Mukesh Ambani (Reliance Industries), Naren Gupta (Nexus Capital), and Ram Shriram (Sherpalo). Jeffrey A. Okun is Sr. Vice-President of Visual Effects.

Prana Studios, Inc. is an anchor venture investor and partner in Kidaptive, an innovative educational technology company dedicated to smart storytelling on iPads. The curriculum is developed in collaboration with Stanford University researchers to create entertaining and adaptive content that helps children learn.

Major credits include the Academy Award submitted “Secret of the Wings”, “Tinkerbell and the Great Fairy Rescue” and “Tinkerbell and the Lost Treasure” (Walt Disney Studios), “Hitchcock,” (20th Century Fox), “The Watch,” (20th Century Fox), “Tron Legacy” (Walt Disney Studios), “Transformers, Dark of the Moon” (Paramount Pictures), “Thor” (Paramount Pictures), “Tinkerbell” (Walt Disney Studios), “The Chubb-Chubbs Save Xmas” (Sony Pictures Imageworks/Sony Pictures Animation), “Hoodwinked” (The Weinstein Co.), Unstable Fables (The Weinstein Co./The Jim Henson Co.), among others.