Company expected to take over film unit
Canada’s Peace Arch Entertainment expects to close a deal to take over London-based ContentFilm within six weeks, company execs said Wednesday. Peace Arch late last week fielded a £34.8 million ($69.3 million) takeover bid for the sales and distribution company.
Peace Arch CEO Jeff Sagansky and his business partner Kerry McCluggage are key investors in both Peace Arch and ContentFilm. Sagansky recently signaled that their long-term plan is to consolidate their investments to create a large-scale indie capable of competing with the Hollywood majors.
Peace Arch prexy and chief operating officer John Flock told Daily Variety that the potential acquisition of ContentFilm could have a huge impact on his company.
“I think it’s a game-changer for Peace Arch,” Flock said. “They’re very strong in international television, and we’ve been building our film sales company. So we’ll end up with an industry-leading sales company. I think the combination of our Canadian DVD distribution operation with their U.S. DVD distribution operation creates a really strong independent. We also expect there will be significant savings in combining these two public companies.
“Right now, you’re paying twice for the privilege of being public and we’re sending multiple teams to markets. We think with the combination, the pieces mesh together quite nicely.”
Flock said Peace Arch is looking for still other complementary companies to buy and expand the company further.
The news came as ContentFilm announced half-year net profits down 76% to $896,000 and sales down 5% to $20.3 million.
The bid from Peace Arch values Content at 20 pence (39.8¢) per share. Content’s stock closed at 16.26 pence (32.3¢) on London’s Alternative Investment Market on Monday, the last day on which trades were reported this week.
Peace Arch’s stock closed Wednesday at $1.55 on the American Stock Exchange, down 7¢, or 4.32%.
Content’s business includes the TV sales division Fireworks Intl., the film sales outfit ContentFilm Intl. and North American DVD distributor Allumination Filmworks.
The company blamed its first-half performance on “challenging” market conditions for Allumination and a “quiet” six months for ContentFilm. Sales at Fireworks, however, continued to be “very strong” and “in excess of expectations.”
Sagansky said the proposed takeover of ContentFilm would create “one of the strongest independent film sales companies in the business” and make Peace Arch “one of the top international suppliers of high-quality TV programming and … one of the largest independent DVD distributors in North America.”
Sagansky is the former topper of TriStar and CBS; McCluggage is the former chairman of Paramount TV Group.
Earlier this month, Peace Arch announced that it had pacted with First Look Studios to distribute 32 First Look pics in Canada.