Italy's Mondo Home Entertainment has acquired a 51% stake in ambitious local theatrical distributor Moviemax.

MondoHE is Italy's leading company in the home entertainment and video-on-demand sector.

Itsparent company, Mondo TV, is Italy's premier animation outfit was only thesecond entertainment company after Mediaset to be listed on the Milan StockExchange.

The$3m (Euros 2.5m) deal marks Mondo HE's entry in the theatrical distribution sector.

Moviemax'sRudolph Gentile and Marco Dell'Utri will retain 49% of the new company, calledMoviemax Italia. They will respectively act as president and vice-president ofthe outfit, with Gentile directly responsible for acquisitions and Dell'Utrihandling marketing.

MondoHE's CEO Guglielmo Marchetti will take up the same position at Moviemax Italia.

"Theacquisition of Moviemax Italia is a clear signal of our company's wish toreach our objectives, both from a strategic and from a financial point ofview," Marchetti said.

"Theunion of both companies will create a financially strong company with specificexpertise that can compete on an equal level with the most important theatricaldistributors, both among independents and studios," he added.

Moviemaxwas founded by Gentile, a young entrepreneur with previous experience in theaviation sector, and Dell'Utri in 2003.

TheRome-based company, which operates in the theatrical, TV and home entertainmentsectors, expects to have a turnover of $7.2m (Euros 6m) in 2005.

Lastyear, Moviemax released 2001 title Donnie Darko, which had never previouslybeen distributed in Italy. The film went on to gross over £3m (Euros 2.2m) atthe Italian box office.

Moviemaxtitles also include Head in the Clouds with Charlize Theron, Tale of the Mummy and Korean film Swordin the Moon.