French theatrical release of MK2 slate in France will be handled by Diaphana in the future.

Paris-based producer, distributor and exhibitor MK2 has closed down its in-house theatrical distribution division and signed a deal with independent distributor Diaphana to handle the release of its production and acquisition slate in the future as part of a major restructuring of the 46-year-old company.

Company CEO Nathanael Karmitz delineated his restructuring plan - re-focusing MK2’s activities on the international market and away from local distribution - in an interview with French film trade Le Film Français on Friday. Karmitz would not comment further on the interview but a spokeswoman at MK2 confirmed the details.

“MK2 will continue to buys films, manage its catalogue and oversee international sales and local television sales as well as edit its DVD label but theatrical distribution will be done in another way other than an integrated service,” Karmitz said in the interview.

Under the restructuring, MK2 has signed a deal with Michel Saint-Jean’s independent distribution and production company Diaphana to manage the theatrical release of its films in France.

Under the accord, MK2 will handle international sales on Diaphana’s productions and acquisitions.

MK2’s remaining film activities have been regrouped in a new content division called MK2 Films, which will be headed by international sales chief Juliette Schrameck,

The new arrangement takes effect from Feb 6. The first MK2 title set to be released under the deal is Marc-Henri Wajnberg’s feature documentary Kinshasa Kids which comes out in France on April 3.

Karmitz said the restructuring was in response to the rapidly changing distribution scene in France, in which films and distribution companies had proliferated in recent years.

“Acquisition costs keep going up due to the fierce competition… A medium-sized structure like MK2 has to make a choice, invest more deeply to haul itself up to the level of the majors or reduce its activities to limit its costs without however completely reducing the risks… We have decided to go down a third route by working with Diaphana. I’m convinced that partnerships like this between independents are the future,” said Karmitz.

The 34-year-old CEO said that the lacklustre performance of MK2 films such as On the Road. Like Someone in Love and Something in the Air at the French box office last year had prompted the company to rethink its activities.

“We didn’t loose money because we had sold these films into some 30 territories but the French admissions were not as good as we had hoped for such works. We asked ourselves where our priorities lay and decided it was more on the international and catalogue side than in the theatres,” said Karmitz.