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Imax spends $25 mil for projection giant

Buy puts film company on digital edge

TORONTO — Large-format film company Imax Corp. has purchased U.K.-based Digital Projection Intl. PLC in a deal that industry analysts estimate is worth between $25 million and $30 million.

DPI, headquartered in Manchester, develops and sells high-end digital projection equipment used at rock concerts, casinos, tradeshows and electronic billboards.

“This company has tremendous potential to develop a 35mm-type electronic cinema projector,” said Imax co-CEO Richard Gelfond, who added that Imax decided to buy the private, management-owned company after about a year of looking at the digital industry. “They’ve been operating without a lot of capital, and we hope to be able to use our capital selectively to help them find opportunities.”

Analysts like the deal. Not only will it allow Imax to be on top of the conversion of projection systems in movie theaters from 35 mm to digital, estimated in a Bear Sterns report to take place in about five years, but it also helps address the risk of Imax reaching a sales saturation point for their own systems, which in the same report is to take place in five to 10 years.

Imax execs, taking their cue from the likes of George Lucas on digital cinema as the way of the future, see technology like DPI eventually crowding out 35mm films completely, and “someday, probably” even Imax’s own 70mm product, acknowledged Gelfond, adding, “but that’s a long way off.”