Entertainment One Regulatory News (ETO)

9 Jan 2008 07:01

Entertainment One Ltd09 January 2008 9th January 2008 Entertainment One Ltd Acquisition of RCV Entertainment Entertainment One Ltd. (the "Company"), the international independent film andentertainment content business, today announces that it has conditionally agreedto acquire RCV Entertainment B.V. and its subsidiaries ("RCV") for a totalconsideration of €41.5 million (approximately £31 million), payable in cash. RCV is a leading independent film distributor in the Dutch and Belgian markets.Its core business is the acquisition and exploitation of independent motionpictures in Holland and Belgium. RCV acquires and exploits motion picturesacross theatrical, home entertainment and TV broadcast release windows. RCV ownsa film library of approximately 1,900 titles, made up of predominantlyindependent Hollywood titles alongside local-language content. Transaction Highlights •RCV is a leading independent Benelux film distributor •Long-term, all-rights library of c.1900 titles including titles such as the English Patient, Kill Bill, Blade II, Scary Movie & Chicago •Focus on independent films from leading US and international studios including New Line, Focus, and Lions Gate together with locally produced independent films •Combined total of over 70 new theatrical releases expected across Dutch and Belgian markets in 2007 including the Golden Compass and Hairspray •Acquisition makes the Company one of the largest independent film distributors by number of territories, with significant operations in the UK, Canada, USA, Holland and Belgium •In the year to 31 December 2006, RCV generated revenue of €31million and EBITDA after film amortisation of €5.6 million •Management team with over 25 years' of Benelux film experience to remain in place •Expected to be earnings enhancing in the current financial year •Acquisition to be funded by way of a senior debt facility, the issuance of exchangeable loan notes and a placing of new shares for cash Entertainment One's strategy is to build a leading international entertainmentcontent ownership and distribution business. The acquisition of RCV follows onfrom the acquisitions of UK based Contender Entertainment Group in July 2007 andof Canada based Seville Pictures in August 2007. The Board of Directors of theCompany believe that the acquisition of RCV further establishes EntertainmentOne's position as a multi-territory film distributor and provides the group withadditional scale and reach from which to further deliver its strategy. Darren Throop, CEO of the Company, said:"This deal represents another significant step in our strategy to furtherenhance our position as a leading international film and entertainment contentowner and distributor. Following our acquisitions earlier in the year ofContender in the UK and Seville in Canada, and our multi-territory distributionagreement with Summit Entertainment, we have now established ourselves as amulti-territory distributor of significant scale in the international market." Completion of the acquisition is expected to take place on 11th January 2008. Financing the Acquisition Placing The Company raised £3 million of equity by way of a placing of 2,898,552 newOrdinary Shares (the "Placing Shares") at a price of 103.5p per share, the netproceeds of which will be used to help fund the acquisition. The new OrdinaryShares will rank parri passu in all respects with the existing ordinary shares.Application has been made to admit the new ordinary shares to trading on AIM andadmission is expected to take place on 10 January 2008 Exchangeable Loan Note The Company has issued a £25 million 5 year 10% exchangeable note, £19.6 millionof which will be drawn down, with £17.0 million being used to help fund theacquisition of RCV. The note is exchangeable into ordinary shares in the Companyat a 10% premium to the average market price of the shares of the Companysubject to certain performance criteria. Senior Debt Additional senior debt facilities of €15 million are being provided by BarclaysBank plc. Grant of Share Options Share awards under the Company's employee incentive schemes representing 1.4million ordinary shares will be made to certain employees of RCV on or shortlyafter completion of the acquisition. Total Voting Rights The total number of ordinary shares in issue following the issue of the PlacingShares will be 129,996,149. Shareholders may use the above figure (129,996,149ordinary shares) as the denominator for the calculations by which they willdetermine if they are required to notify their interest in, or a change to theirinterest in, the Company. For further information, please contact FinsburyFaeth Birch / Don HunterTel: +44 (0)20 7251 3801faeth.birch@finsbury.com / don.hunter@finsbury.com Entertainment OneDarren Throop (CEO) Giles Willits (CFO)Tel: +1 (905) 282 7878 Tel: +44 (0)20 7004 2700dthroop@entertainmentone.ca gileswillits@entertainmentonegroup.com Kaupthing Singer & Friedlander Capital Markets LimitedMarc Young/James MaxwellTel: +44 (0)20 3205 7624 About Entertainment One Ltd (LSE: ETO) Admitted to trading on AIM on 29 March 2007, Entertainment One Ltd.'s strategyis to build the leading international independent entertainment contentownership and distribution business which acquires films, television programsand music content and exploits these rights in all media throughout the world. Entertainment One is the largest distributor of home entertainment products inthe Canadian market and, following the acquisition of Seville Entertainment inCanada in August 2007, it also has a significant presence in the theatrical andinternational sales markets. Following the acquisition of Contender in July2007, Entertainment One also owns a leading independent UK distributor of filmedentertainment. Entertainment One significantly enhanced its film supply through a long termmulti-territory deal in September 2007 with Hollywood studio SummitEntertainment Inc. The company owns Koch Entertainment, the largest independent record label inNorth America and a leading independent distributor of music and video in theUnited States. This information is provided by RNS The company news service from the London Stock Exchange