Netflix to Acquire Scanline

Netflix, Inc. (NFLX) has inked a deal to acquire one of the leading and innovative visual-effects studios in the world, Scanline VFX, to enhance the former’s world of visual effects. The financial terms of the deal have been kept under wraps.

Founded in 1989, Scanline is well known for its complex, photorealistic effects. With expertise in virtual production, it has done great work on popular titles ranging from Stranger Things, Game of Thrones to Godzilla vs Kong, and Zack Snyder’s Justice League, to name a few.

With offices in Vancouver, Montreal, Los Angeles, London, Munich, Stuttgart, and Seoul, Scanline has consistently supported Netflix on a variety of VFX achievements as well as many famous titles.

Details of the Deal

Netflix plans to make incremental investments in Scanline’s pipeline, infrastructure, and workforce. Netflix will also continue to support the pioneering work at Scanline’s Eyeline Studios to enhance its virtual production capabilities.

The acquisition is expected to close in the first quarter of FY2022, subject to certain regulatory approvals.

Upon completion, Scanline will continue to operate as a standalone business that will continue to work with a variety of clients.

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Management Weighs In

Management commented, “We’ll also continue to rely on many other studios around the world for our VFX needs so we can continue to ensure that our creators have access to the world’s most innovative tech, and continue to bring the most compelling and cutting-edge storytelling to our members.”

Wall Street’s Take

The Wall Street community is cautiously optimistic about the stock with a Moderate Buy consensus rating based on 26 Buys, 5 Holds, and 3 Sells. At the time of writing, the average Netflix price target was $680.88, which implies 3.3% upside potential to current levels.