EdgeStone, GS to take stake in distributor
MONTREAL — Canada’s leading film distributor is set to be taken over by Toronto-based private equity firm EdgeStone Capital Partners and an affiliate of Goldman Sachs.
EdgeStone and GS Capital Partners, a private equity affiliate of Goldman Sachs, have inked with the Toronto-based Movie Distribution Income Fund to acquire the fund’s 49% stake in Motion Picture Distribution, Canada’s top film distributor and one of the world’s leading independent film distribs.
Motion Picture Distribution controls 10%-15% of the domestic theatrical market in Canada; it also operates in both the U.K. (via Momentum Pictures) and Spain (via Aurum).
EdgeStone and Goldman Sachs will pay around C$193 million ($180 million) for the 49% stake in the distrib.
The other 51% of Motion Picture Distribution is controlled by Toronto-based broadcaster Alliance Atlantis, but Alliance itself has been recently sold for $2.1 billion to CanWest Global Communications and Goldman Sachs.
EdgeStone prexy Samuel Duboc told Daily Variety that Motion Picture Distribution will be 100%-owned by EdgeStone and Goldman Sachs, with CanWest having no ownership stake in the distributor.
The company will be controlled by EdgeStone, said Duboc, though he would not provide details of the partnership between EdgeStone and Goldman Sachs. Under Canadian law, it is illegal for a distributor to operate in the country if it is not Canadian-controlled. (The Hollywood studios are exempt from this law under a grandfather clause.)
But many in the Canadian film industry fear that Goldman Sachs will really control Motion Picture Distribution. Some of the country’s top filmmakers — including helmers Atom Egoyan and David Cronenberg and producer Robert Lantos — have voiced concern about the possibility that Motion Picture Distribution will be controlled by American interests.
“My response is that it’s going to be a company controlled by a Canadian company,” Duboc said. “So the fears are unfounded.”
Duboc said his company has no plans to change how MPD operates, given its leading position in the Canadian market. The company has output deals with many U.S. film companies, including New Line and Miramax.
“Our plan is to provide the capital to allow the business to grow,” Duboc said.
EdgeStone and Goldman Sachs also plan to take MPD private.
Movie Distribution Income Fund unit-holders will vote on the deal at a special meeting Aug. 3.