BREAKING: Alliance Films Paying $38M For Maple Pictures; Most Of Maple Staff Expected To Be Let Go
Santa Monica, CA, Vancouver, BC, and Montreal, Quebec (June 23, 2011) – Lionsgate (NYSE: LGF), a leading global entertainment company, and Alliance Films, a leading Canadian distributor of motion pictures and television programming, announced that the Alliance group has agreed to purchase Lionsgate’s Canadian distributor Maple Pictures for approximately $38.5 million subject to a working capital adjustment. The announcement was made by Lionsgate President and Co-Chief Operating Officer Steve Beeks and Alliance President Charles Layton and remains subject to approval by Canadian regulatory authorities.
The Alliance group will acquire Maple and its film library and will assume responsibility for Maple’s exclusive five-year output deal with Lionsgate for Canadian distribution of Lionsgate’s motion picture and television product and Maple’s exclusive long-term arrangement for distribution of Lionsgate’s prestigious filmed entertainment library in Canada. Maple founders and Co-Presidents Laurie May and Brad Pelman will join the Alliance team.
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EXCLUSIVE: I hear the deal was signed on Friday. So any moment now there’ll be an announcement that Canada’s Alliance Films President Charles Layton has finalized the purchase of his competitor Maple Pictures, which is primarily owned by Lionsgate. “But when you have Charles Layton involved in a deal, anything can happen!” a source tells me about the Alliance chief who’s been in the final due diligence stage. The deal has caused quite a lot of consternation up north because it will change the landscape of film distribution there — and for the worse, not the better. Also a bloodbath is expected: predictions are for the entire Maple staff of 30 to 40 employees to be let go with the exception of the two co-CEOs Laurie May and Brad Pelman, both former Lionsgate execs. Moving forward, Lionsgate’s films will be distributed by Alliance in Canada. This is part of Lionsgate’s divestiture plan to sell off what it considers non-core assets and raise cash to pay down debt following a year of fending of that hostile takeover attempt by corporate raider/shareholder activist Carl Icahn who planned to give LG to his son Brett. Lionsgate stock right now is still stuck in neutral, and the Maple stake is considered peripheral. (Lionsgate still maintains a distribution operation in the UK.)
Multiple sources tell me that Alliance is paying $38M for Maple. What Canada’s No. 1 indie film distributor is buying is an output deal with Lionsgate for Canada and the rights to the library, which is quite impressive, for a limited number of years — reportedly between 4-7 years. Lionsgate owns the vast majority of the economic interest in Maple (not just 10% as has been reported). Read More »