Canal Plus ready to invade Germany with Kinowelt buy
Final details set for $103 mil dealFrench pay TV group Canal Plus expects to close a €70 million ($103 million) deal to buy German distributor-producer Kinowelt early next week.
Canal Plus executives are in Berlin working out the final details of the deal with Kinowelt owners Michael and Rainer Kolmel.
The deal would see Canal Plus take full control of Kinowelt, with the Kolmels remaining on in an advisory capacity. Kinowelt managing director Bertil le Claire will continue to run day-to-day operations at the company.
For the Kolmels, the deal caps a comeback from the dark days of 2001 when Kinowelt was forced to file for bankruptcy protection and a nasty battle for control of the group's assets ensued.
The Kolmel brothers emerged victorious and proceeded to claw back DVD market share in Germany, in part by snatching up titles from ailing companies, including the KirchGroup's Epsilon and Intertainment.
The Leipzig-based group is now again one of Germany's leading DVD distributors. Revenue in 2006, the last year the company released results, was up more than 30% to $150 million and profit jumped to $7.2 million from $5 million a year earlier.
With Canal Plus as a financial backer, the Kolmels will have the cash to expand, both in Germany, where they have just restarted Kinowelt's film production business, and abroad, likely in Eastern Europe.
For the French giant, Kinowelt is a beachhead in the German-language market, key in the plans of Canal Plus head Bertrand Meheut to turn his company into a pan-European powerhouse.
Scott Roxborough reported from Cologne, Germany; Rebecca Leffler reported from Paris.