Canada's Entertainment One Agrees to Acquire Alliance Films for $230 Million
UPDATED: The deal will create the largest indie film distributor in the U.K. and Canada and make eOne "a more competitive business," says CEO Darren Throop.
Canada's Entertainment One has agreed to acquire Alliance Films in a long-negotiated deal potentially worth C$272 million ($277 million).
The Canadian producer/distributor had said in May that it was negotiating a possible transaction.
A deal for Alliance was originally expected during the Cannes Film Festival. Alliance owners Goldman Sachs Capital Partners and Investissement Quebec had the Bank of Montreal secure a buyer for Canada’s largest independent distributor.
The deal will make Entertainment One the largest indie distributor in the Canadian and U.K. markets, according to the company.
"The directors believe that the acquisition will strengthen Entertainment One's existing film distribution business and help drive growth," the company said in a statement.
Alliance's owners will get C$225 million ($230 million) in the transaction. They could get some additional money if some films that eOne is buying exceed certain box office performance targets. Tax provisions that could be settled for less than their currently estimated amount could also further add to the price tag.
"The combination of Entertainment One and Alliance Films will create the leading global independent film distribution business, which alongside our television and family divisions will deliver a strong strategic platform for long term growth," said Darren Throop, president and CEO of Entertainment One. "As a result of the acquisition, eOne will be a more competitive business in each of the geographic markets that we serve, allowing us to act as a more valuable partner for content producers and expanding the quality and depth of the content that we offer to our customers."
Added Throop: "I am extremely excited by the opportunities available to us to grow the group and we look forward to representing the very best in independent film across all of our markets. This acquisition means that eOne is better positioned than ever to generate significant value for shareholders."
Alliance's slate includes key films at this week's Toronto International Film Festival, including opening night film Looper, Place Beyond the Pines, Hyde Park on the Hudson, Dredd, Anna Karenina, Seven Psychopaths, Silver Linings Playbook, Quartet, Lords of Salem, The Bay, Antiviral, Foxfire, Inescapable and Laurence Anyways.
Entertainment One has released such films as The Twilight Saga: Breaking Dawn - Part 1, We Need to Talk About Kevin and Tinker, Tailor, Soldier, Spy. The company said it is presenting 18 premium films, as well as titles being sold by the international sales team, at the Toronto International Film Festival.
"Upon completion of the deal, the group will have increased access to the most successful independent film studios through output agreements in Canada, including with The Weinstein Company, Focus Features and Relativity," Entertainment One said.
Alliance and Entertainment One operate in markets that are "highly complementary," the firm said. The merged company will have an international reach across Canada, the U.K., the Benelux countries, Australia, the U.S. and Spain.
"eOne and Alliance Films share similar values," said Alliance chairman and CEO Victor Loewy. "We both have a strong commitment to supporting film, culture and talent in Canada and in each of our territories. We also have passion for this business."