DVD tie-up for Peace Arch, ContentFilm

Companies set to merge distribution arms

TORONTO -- Canadian producer-distributor Peace Arch Entertainment and Britain's ContentFilm are merging their U.S. DVD distribution arms, effective July 1.

The agreement, announced Tuesday, will see the companies pool backroom operations for Peace Arch Home Entertainment and ContentFilm's Allumination Filmworks in South Carolina, creating a 50-50 joint venture, Peace Arch Home Entertainment Llc., whose profits will be shared evenly.

The merger agreement follows a failed bid this year by Peace Arch to acquire London-based ContentFilm for $69.3 million.

Peace Arch CEO Jeff Sagansky, who has key investment stakes in Peace Arch and ContentFilm, said the new indie company will be large enough to compete with the Hollywood majors.

The proposed joint venture, to be overseen by Peace Arch Home Entertainment president Berry Meyerowitz, will enable Peace Arch and ContentFilm to retain ownership of their existing catalogs.

The deal also is structured so that Peace Arch can distribute movies acquired through the joint venture for international theatrical release, while on the broadcast side ContentFilm can sell TV, direct-to-DVD and library titles acquired by the new company.

Peace Arch is forecasting that the joint venture's overhead will be about 30% less than the current combined overheads for Peace Arch and ContentFilm's U.S. home entertainment arms.

Peace Arch COO John Flock said that the venture will be run out of Peace Arch's office in Los Angeles and Toronto, with a combined shipping operation based out of Allumination Filmworks' current facility in South Carolina.

Flock added that Peace Arch does not intend for the joint venture to serve as an overture to resurrecting its failed takeover bid for ContentFilm.