Ramping up its ambitious growth plans, Lionsgate has acquired Mandate Pictures in a deal worth $56.3 million and installed Mandate CEO Joe Drake as chief operating officer of the Lionsgate Motion Picture Group.
Drake, who will be above most of the Lionsgate execs, will oversee production, distribution, marketing, acquisition and international theatrical operations, reporting directly to Lionsgate co-chair and CEO Jon Feltheimer. He’ll continue in his Mandate post as well.
Mandate will receive $44.3 million in cash and $12 million in stock over 18 months, while Lionsgate assumes $6.6 million in debt. News of the deal had emerged over the summer, and Monday’s announcement had little impact on Lionsgate stock as shares edged down 1.3% to $9.22 on the NYSE.
Transaction brings Drake back to Lionsgate after a six-year absence. When he left to launch Mandate with Nathan Kahane and Brian Goldsmith, he was head of Lionsgate’s international distribution division.
“We’re very excited to be bringing Joe back to Lionsgate,” Feltheimer said in a statement. “This acquisition reunites an entrepreneurial executive with an entrepreneurial company as well as adding a third-party domestic and international profit center to our diverse business operations.”
Feltheimer told Daily Variety that Drake’s arrival will simplify the corporate reporting structure, enabling Feltheimer to concentrate on larger corporate issues and build the company’s television operations.
Feltheimer emphasized that the appointment of Drake doesn’t imply any dissatisfaction with the performance of four execs who will come under Drake’s supervision — marketing/distribution head Tom Ortenberg, president of Lionsgate Theatrical; production chief Mike Paseornek; acquisitions and co-productions topper Peter Block; and international theatrical prexy Stephanie Denton.
“We’ve been very, very pleased with the growth of the film business,” Feltheimer added. “As the company gets bigger, we need to bring on entrepreneurial executives like Joe.”
Other Lionsgate deals over the past two years have included the purchase of Redbus Film Distributors in the U.K. and of independent TV syndicator Debmar-Mercury; the launch of the FearNet channel with Sony and Comcast; the acquisition of the U.K. DVD distribution company Elevation Sales by a Lionsgate/StudioCanal partnership; and investments in online marketing destination Break.com and indie film distrib Roadside Attractions.
Monday’s announcement came after Lionsgate’s “3:10 to Yuma” won the weekend box office with $14 million. The company has ramped up to 20 annual releases, with “Good Luck Chuck” up next on Sept. 21, “Tyler Perry’s Why Did I Get Married” on Oct. 12 and “Saw IV” on Oct. 26.
As for Mandate, it will continue to operate from Beverly Hills, with Kahane as its new president. It’s expected to continue producing four to six films per year under its current business model, which taps foreign sales to help finance its slate. Mandate’s upcoming pics include “Mr. Magorium’s Wonder Emporium,” “Juno” and “Harold & Kumar 2.”
Mandate’s Ghost House Pictures joint venture with Sam Raimi and Rob Tapert has resulted in four No. 1 box office releases — “The Grudge,” “Boogeyman,” “The Grudge 2” and “The Messengers” — and will release “30 Days of Night” this fall. Mandate handles international sales and distribution of its own projects, as well as films from outside production companies such as “Because I Said So,” “White Jazz” and “Sleuth.”