US-based video, CD, DVD and film print manufacturer Technicolor is investing $19m (A$33m) in Australia's Southern Star Duplitek, which will use $16m (A$28m) of the cash to acquire rival optical disc manufacturer Pacific Mirror Image (PMI).
Both companies will then assume responsibility for new capital expenditures at PMI totalling about $6.4m (A$11m).
Technicolor is a wholly owned subsidiary of the UK's Carlton Communications, while SS Duplitek is part of the Southern Star Group which owns television production and distribution operations in Sydney and London along with a film sales arm.
Southern Star executive chair Neil Balnaves estimates that the combined entity will have sales in excess of $58m (A$100m) due to increasing demand for DVD and other new media. Technicolor has the right to expand its minority interest in the future.