Lions Gate Entertainment hasspun off its Canadian distribution operation into a new venture called MaplePictures, headed up by former Lions Gate executives Brad Pelman and Laurie May.The move sees the once-all-Canadian Lions Gate strip away its Canadian assetsand now focus firmly on its US operation.

Lions Gate will neverthelesshold a minority stake in Maple, which it claims becomes the second largestindependent distributor in Canada after Alliance Atlantis MPD. Maple willhandle Lions Gate's motion picture, television and home video product, as wellas other content to be unveiled over time.

Pelman and May will hold a"significant" stake in Maple, along with two unidentified Canadian privateequity partners. Maple Pictures also purchased a majority of Lions Gate'sinterest in Christal Distribution, a number of production entities and otherLions Gate distribution assets in Canada.

Alliance Atlantis itselfspun off its lucrative Canadian and UK distribution businesses in Sept 2003into a new public company called Motion Picture Distribution (MPD), although,unlike Lions Gate, it retained a majority stake in the venture.

"We have tremendous faith inBrad and Laurie's management skills and knowledge of the Canadian marketplace,"Lions Gate chief executive officer Jon Feltheimer said in a statement.

"This is a great opportunityfor them to run their own company while putting our Canadian distributioncapabilities in good hands and further reducing Lions Gate's overhead."

"We are very excited aboutthe continuing growth of the Canadian marketplace, and we appreciate theopportunity that Lions Gate has given us to use our expertise to capitalise onthis growth by setting up our own independent Canadian film company," Pelmanand May added in a joint statement.

"The steady pipeline ofinnovative, quality product that we will receive from Lions Gate through ourlibrary and output agreements will be a good foundation for our continuedgrowth and success in the future."

Pelman joined Lions Gate in1999 and most recently served as executive vice president of sales anddistribution and co-manager of the Toronto office, where he oversaw thecompany's businesses in Canada.

May joined the company in1997 and has served as senior vice president of business and legal affairs and co-managerof the Toronto office. A key player in most types of transactions, she has alsoshared management of Lions Gate's Canadian operations.

RBC Royal Bank Media &Entertainment Group (Toronto) provided financing for the transaction, howeverspecific details had not been disclosed at time of writing.

Lions Gate Entertainmentpresident Steve Beeks will serve on Maple's board of directors.