A Folsom distributor of DVDs, video games and other home entertainment products has been sold to one of the giants in the business, raising the possibility that at least some of its operations could be closed or downsized.
Amid an industrywide restructuring brought on by the rise of digital distribution of movies and games, VPD Inc. of Folsom was sold to Ingram Entertainment Inc. of La Vergne, Tenn., the two companies announced Wednesday. Terms of the deal, which was completed Monday, weren’t disclosed.
David Ingram, chairman of the Tennessee company, told The Sacramento Bee that all VPD employees will keep their jobs for 90 days but “without a doubt” some consolidation could take place.
He said his company will decide in the coming months “which facilities to keep open and which employees to keep onboard.” VPD employs a total of about 160 workers at its facilities, including the Folsom headquarters, an Ohio distribution center and a small facility in Texas, he said. Ingram has distribution centers in Orange County and Portland.
Despite the possibility of consolidation, Ingram said “it’s highly likely we’ll maintain a presence in Sacramento.” A separate company Ingram owns, a beer distributor called DBI Beverage, maintains a warehouse in West Sacramento, although he said no decisions have been made on whether that facility could be incorporated into the video business.
Tim Shannahan, the Folsom company’s chairman, chief executive and principal owner, couldn’t be reached for comment. He said in a press release that leaving the business “is bittersweet for me, to say the least.”
The deal comes amid a gradual decline in sales of video discs and other physical products as consumers switch to Netflix and other digital forms of entertainment. Giant video-rental chain Blockbuster went out of business last winter; it had been one of VPD’s largest customers, according to Ingram.
“There were some changes in the industry that had Tim Shannahan decide to call it a day,” Ingram said.
Despite the structural changes hitting the industry, Ingram said, VPD still had some big customers, including a major rental chain called Family Video.
“That’s a piece of the business that appears to be going strong,” Ingram said. “There are a number of outlets that still sell physical product.”
He said buying VPD is expected to add about $200 million in annual revenue to his company. Privately held Ingram reported on its website that it did sales of $544 million last year.
Ingram distributes DVDs, Blu-ray discs, audiobooks and other products to specialty retailers, drugstores and supermarkets.
VPD, formerly known as Video Products Distributors, was founded in 1980, back when the industry was still torn between the VHS and Betamax formats. For several years, in the early 1990s, the Folsom company was controlled by a Connecticut venture capital firm. Shannahan, who had been in the video distribution business in his native Iowa, bought out the Connecticut group in 1994.
Call The Bee’s Dale Kasler, (916) 321-1066. Follow him on Twitter @dakasler.