After acquiring amajority stake in the license trader Intertainment earlier this year, theKinowelt Group has now continued its expansion by taking over the Cologne-baseddistributor-producer Pegasos Filmverleih und Produktion.

In the deal signedin Leipzig on the eve of this year's Hof Film Days, Kinowelt has committed tocontinuing Pegasos' business exploiting rights to more than 80 feature filmsand documentaries and the co-production of international feature films. Thecompany's founders Ernst Szebedits and Karl 'Baumi' Baumgartner willserve as advisors to Pegasos in the future.

According toKinowelt, the Pegasos back catalogue - which includes such titles as TheoAngelopoulos' Eternity And A Day,Emir Kusturica's Super 8 Stories,Christian Petzold's The State I Am In,and the documentaries Ayurveda and The Knowledge Of Healing - isparticularly attractive because the majority of the films have not yet beenreleased on DVD in Germany.

Those films whichhave not yet appeared on DVD will be gradually released via the ARTHAUS labelof Kinowelt Home Entertainment, while the Pegasos titles distributed until nowby the DVD distributor Good Movies will have their distribution handled byKinowelt Home Entertainment from mid-2007.

In addition,Kinowelt's theatrical arm Kinowelt Filmverleih will handle the repertorybooking of Pegasos titles from Jan 1, 2007.

Speaking to in Hof, Ernst Szebeditsexplained that the last films co-produced by Pegasos had been Petr Zelenka's Wrong Side Up, Nacer Khemir's Bab' Aziz and Dusan Milic's Jagoda In The Supermarket.

This is not thefirst time that Baumgartner has done business with Kinowelt. In 1998, he andhis business partner Reinhard Brundig sold their distribution company PandoraFilm and its catalogue to the then publicly listed Kinowelt AG. In 2002, theyresurrected the distribution arm to release such films as Aki Kaurismaki's The Man Without A Past and Niki Caro's Whale Rider. This year, Pandora-Verleihhas seen Sven Taddicken's Emma's Blisstake more than $2.2m (Euros 1.7m) at the German box office and has Aki Kaurismaki'sLights In The Dusk (showing as aGerman premiere in Hof this week), Pan Nalin's Valley Of Flowers and Fatih Akin's Auf Der Anderen Seite among its forthcoming releases.