ContentFilm is in talks to acquire the US' First Look Media, marking Content's first major strategic step since joining London's AIM stock-market via its takeover of Winchester Entertainment.
The move, announced to the stock market on Friday, gives Content a North American home video and DVD distribution business, plus a film library of some 350 titles including Evelyn, Waking Ned Devine and Antonia's Line.
The deal is likely to see Content assume $12m of First Look debt. Content will also issue stock and pay cash worth $15m, representing the equity equivalent of approximately $1.00 per First Look share.
"There are limited points of entry into the North American video business and First Look has builta significant business in this sector which is poised for further growth,"; said John Schmidt and Ed Pressman, joint chief executives of Content. "Additionally, First Look's library brings critical mass to our worldwide sales operation and existing library and a steady source of earnings and cash flow."
The takeover, subject to duediligence and shareholder approval, would more than double Content'srevenue base and international sales operation. In the year to 31 December2003, First Look achieved audited revenues of US$28.3m and generated cash ofapproximately $7m. The majority of turnover was generated by First LookInternational, with First Look Home Entertainment generating the second largestcomponent.
"Chris Cooney and Bill Lischak have done a great job of bringing First Look to its present state of stable revenue and positive cash flow and we look forward to the opportunity of working with them to build both companies' success from here," said Schmidt and Ed Pressman.