Full ownership for Village

VRL buys rest of Roadshow stake

Village Roadshow Ltd. said Wednesday that it will acquire the 50% of local film and TV distributor Roadshow Distributors Group that it does not already own.

The Australian entertainment company will pay its 20-year joint-venture partner, Amalgamated Holdings Ltd., AUS$129 million ($107 million) for its stake in Roadshow Distributors Group. That figure includes an AUS$95 million ($79 million) cash payment and the payout of Amalgamated shareholder loans totaling AUS$34.4 million ($28.5 million).

Village Roadshow said the acquisition, to be funded by existing cash reserves and undrawn credit facilities, represents a further consolidation of its local businesses and said it will have an immediate positive impact on cash flows and earnings per share. The company has been listed on the Australian Stock Exchange since 1989.

Village Roadshow chairman John Kirby said in a statement to the exchange that the company was "delighted to move to full ownership of this business which we know well and have great confidence in its future."

Said Village Roadshow CEO Graham Burke, "Under our joint ownership, Roadshow grew into the powerhouse it is today, becoming Australia's largest independent film distributor for cinema, DVD and television."

In the past four years, Roadshow Distributors has generated sales of AUS$400 million ($332 million) and earnings of more than AUS$40 million ($33.2 million) a year.

The long-term distribution agreements with Warner Bros. and New Line that have been the cornerstones of Roadshow's profitability will continue, the company said.

Thanks to the record boxoffice and DVD sales of the Warner Bros./Village Roadshow Pictures animated feature "Happy Feet," Roadshow Films achieved a 21% share of the local theatrical market and 15% of DVD sales in the fiscal year ending June 30.

"Happy Feet" is the all-time highest-selling Australian film on DVD, with sales of more than 437,000 units to date.

In a separate statement, Amalgamated, which retains joint ownership of cinemas in the Greater Union cinema chain with Village Roadshow, said that it will focus its investment strategy on its core businesses and those that it directly controls and manages.

"Under our 100% ownership the business will continue to be an integral part of the VRL group, complementing VRL's interests in cinema and film production," Burke said. "VRL will continue to diversify Roadshow's activities to pave the way for new growth opportunities. These opportunities will include Australian film production, Internet, pay per view and VOD."

Upcoming Roadshow releases include "The Brave One," "Hairspray," "I Am Legend," "The Golden Compass," and in 2008, the Wachowski brothers' "Speed Racer." High-performing DVD titles include kids franchise "The Wiggles" and TV series "Little Britain," "Kath and Kim" and "Thank God You're Here."