The UK's Redbus Film Distribution has announced the finalisation of its $16m takeover by Germany's Helkon Media and that it will beat first-quarter expectations with a pre-tax profit of $1.1m.
A significant slice of Helkon's final $8m payment to Redbus will go to Cliff Stanford, the Internet mogul who owns Redbus' former parent Filmgroup. Stanford now has only a 9% holding in Redbus, while Helkon has 51% and co-founders Simon Franks and Zygi Kamasa are understood to control the remainder.
The latest payment from Helkon comes after Stanford filed suit against Helkon last month, claiming that a delay had created financial problems at Filmgroup. The group has wound down its website and is understood to have put plans for its Video-On-Demand service on hold.
"In the last few months the industry has been rife with rumours and negative press speculation about us and I think our numbers will put an end to these rumours," said Franks, who is understood to have clashed with Stanford over the Helkon suit. "For a very young company, we are already making significant profits."
Redbus' first-quarter results were boosted by its successful release of Sam Raimi's The Gift, which has taken more the $7m in the UK so far. The three year-old distributor said it also expects to beat full year profits. Bouyed by cash from Helkon's first $8m instalment, the company secured rights to sought-after upcoming titles such as The Mothman Prophecies, starring Richard Gere, and Hunted, with Benicio Del Toro, at this year's AFM.
"With the successful release of The Gift we have shown we can hold our own in this market," Franks said. "Furthermore, we have cash in the bank as well as our, as yet unused, credit lines."
Kamasa added: "Whilst we do not intend to release our numbers publicly every quarter, it made sense for us to declare our success as we segue into the partnership with Helkon. As well as intending to be the leading independent distributor in the UK, we look forward to playing a full part in Helkon's ambitious pan-European plans. We've come a long way in three years."
Helkon chief executive officer Martin Heldman commented: "We are very impressed with Redbus' first quarter performance. They certainly have exceeded the expectations that we had when we started the acquisition process. Now that the acquisition is complete, we are really looking forward to working with them more closely, and achieving our goal of building a pan-European distribution business."