Toronto 2012: Will Victor Loewy Stay With Alliance Films?
TORONTO -- Will he stay or will he go?
The question of the future of Victor Loewy on news Alliance Films has finally been acquired by rival Canadian indie distributor Entertainment One was on the minds of film distribution players at the Toronto International Film Festival on Friday.
The Canadian industry has been treating the merger of eOne and Alliance Films as a given since news of takeover talks first emerged ahead of the Cannes Film Festival.
What has remained uncertain was what was on Loewy's mind as eOne, led by CEO Darren Throop and filmed entertainment chief Patrice Theroux , his former Quebec lieutenant at Alliance, circled his company.
Loewy wasn't available for immediate comment on Friday, but in recent months has been keeping his cards close to his vest as he waited to see how the merger of eOne and Alliance Films shaked out.
Throop confirmed he will become CEO of the combined entity after the $225 million takeover deal for Alliance Films is completed.
As for Loewy's future, or that of the rest of the Alliance Films management, Throop said it was too early to say as eOne had been negotiating directly with Goldman Sachs Capital Partners, and has yet to reach out to Loewy or his management team.
"We will be discussing this with Victor, and trying to decide what the combined entity will look like, and who¹s going to be helping move that business forward," Throop said.
He added Loewy's value to the combined entity was obvious.
"I can tell you Victor is the godfather of Canadian film and has been for a long time. The knowledge that he would bring to the table is unquestionable," Throop said.
EOne has also not talked directly to Alliance Films' partners in the U.S., including The Weinstein Company, Focus Features and Relativity Media, on whether Loewy¹s continued involvement with Alliance Films under the eOne banner was essential.
"Well be talking to our partners in short order as everyone is here at TIFF," Throop said.
Those discussions will also touch on the synergies and benefits to be had from combining Alliance Films and eOne.
"The combination of alliance and eOne will give us a stronger offering in Canada and the UK and it does add another territory to our international footprint," Throop said as Alliance Films' Spanish operation, Aurum Producciones, is brought into the fold.
EOne earlier acquired an Australian outpost in Hopscotch/Entertainment One that is part of its strategy to build out its global infrastructure to better secure multi-territory film rights from international content producers.
As for additional moves internationally, Throop said eOne is eyeing Latin America, and especially the Brazilian market. And he likes eastern Europe, where the TV markets are showing strength. France and Germany also remain appealing markets for eOne to enter.
"We just need to find a partner and a way to enter those market in a mindful manner," Throop said.
EOne is also pointing with its acquisition to a combined investment in content of around C$225 million ($230 million) in content annually.
And the acquisition promises annualized pre-tax cost synergies of around C$20 million ($20.4 million), according to documents issued Friday by eOne surrounding its acquisition.
To fund the deal, eOne is looking at a combination of proceeds from a placing of around C$175.7 million ($179 million), at 150 pence ($2.40) per-share, and another C$150 million ($153.3 million) in debt financing, with J.P. Morgan as the lead arranger.
Alliance Films is being acquired for an initial C$225 million ($230 million), including C$174.2 million ($178 million) in cash and the rest in assumed debt.
In addition, contingency payments due to sellers Goldman Sachs Capital Partners and Investissement Québec include C$35 million ($35.8 million) if Alliance Films release titles hit box office targets and up to another C$12 million ($12.3 million) for possible tax provisions.
The deal is generating favorable early reviews from the financial community in the UK, where eOne shares are listed.
"We believe the deal creates an exciting and substantial global content exploitation business that should continue to grow strongly over the medium term, driven by consumer appetite for quality film and TV content," analyst Patrick Yau at Peel Hunt said Friday in an investors note.