Peace Arch Home Entertainment Sold21 Apr, 2009 By: Chris Tribbey
Peace Arch Entertainment sold its home entertainment operations April 20 to a consortium led by Peace Arch Home Entertainment President Berry Meyerowitz, including Phase 4 Films Inc., owner of the Kaboom Entertainment children’s label.
Meyerowitz and his current management team will continue to head the new label, which will be called Phase 4 Films. The company will be based out of Toronto, with distribution out of South Carolina.
Meyerowitz said the ability to acquire financing for the venture in this economy is “fantastic.”
“We remain focused on delivering content via traditional channels as we also expand our business into digital distribution,” he said. “Our mission has not changed, and we’re now a privately held company, with none of the constraints we had before.”
Peace Arch had a 50/50 interest — along with London-based ContentFilm Plc. — in Peace Arch Home Entertainment. ContentFilm Plc. will turn its 50% interest into a 22.5% minority stake in the new venture. In return, ContentFilm will be freed of having to make any ongoing capital contributions to Phase 4 Films.
ContentFilm will also have its Allumination Filmworks content distributed in North America via the new label. In mid-2008 Peach Arch Home Entertainment and Allumination Filmworks merged their DVD operations, operating under the former’s banner. Since then, ContentFilm has invested 500,000 euros ($647,650) in Peace Arch Home Entertainment, the company said.
“In place of a 50% stake in a U.S. joint venture with ongoing capital commitments, we now have a minority stake in a larger North American venture with no ongoing capital commitments,” said ContentFilm CEO John Schmidt, in a press release. “We are believers in Berry Meyerowitz and his team and we are pleased that Berry has acquired the business with the support of ContentFilm and his new financiers.”
Along with buying Peace Arch’s half, Phase 4 Films Inc. assumes about $7.75 million in debt, and relieves Peace Arch of a loan guarantee of $2.95 million. Peace Arch will also become an 8.8% shareholder in the new venture. Peace Arch Entertainment Group has not filed any results for fiscal year 2009, and its shares had not been traded on the Toronto Stock Exchange since Dec. 18, 2008.
“The sale of our home entertainment division allows Peace Arch to focus on its core businesses of high quality television production and motion picture licensing while at the same time cutting our overhead, reducing our outstanding indebtedness and strengthening our balance sheet,” said Peace Arch president and COO John Flock.