New Frontier shares are up about 35% in after-hours trading following an announcement that seems to mark an end to the battle over pay TV’s top supplier of porn movies and channels. Hustler magazine creator Larry Flynt‘s LFP Broadcasting signed a definitive agreement that values New Frontier at $33M, or $2.02 a share — a 55% premium over today’s closing price. The deal is expected to close by year end. New Frontier says that the board unanimously endorsed the agreement. It ”creates a great opportunity for our organization, cable television partners and customers as two of the premier adult media broadcasting companies join forces,” New Frontier says. Flynt wants to move fast: Within 10 business days, LFP Broadcasting will begin the process by offering shareholders $2.02 per share, without interest — and under certain circumstances he may add as much as 6 cents per share. His offer expires on the 20th business day. In accepting Flynt’s offer, New Frontier rejected a bid from investment firm Longkloof, which owns 15.9% of the company. Last month the company fired CEO and co-founder Michael Weiner, considered by the board to be too closely allied with Longkloof. It also received an offer from Luxembourg-based Manwin, which bought Playboy TV late last year.

New Frontier Chairman Alan Isaacman told employees in a memo that the deal with Flynt represents a “defining moment” for the company. He added that Hustler “has moved beyond just being a leading print publication company and has expanded into the areas of broadcasting, Internet, DVD distribution, retail stores, apparel, novelties, clubs and owner of the HUSTLER Casino located in the Los Angeles area.”

New Frontier produces VOD features, it also offers the Penthouse TV premium channel and pay-per-view services packaged as The Erotic Networks (or TEN) that include Xtsy, Juicy, and VaVoom. New Frontier’s stock has lost more than 78% of its value over the last five years, in part due to growing competition from the Internet.

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