Peace Arch, ContentFilm Merge U.S. Home-Entertainment Businesses

TORONTO, June 24: After abandoning merger talks earlier this
year, Peace Arch Entertainment Group and ContentFilm have inked a deal to
combine their U.S. home-entertainment operations to create one of the largest
independent DVD distributors in the American market.

Effective
July 1, 2008, Peace Arch Home Entertainment and Allumination Filmworks will be
combined under the Peace Arch Home Entertainment, LLC banner. The venture will be
run by the current Peace Arch Home Entertainment management team, led by its
president, Berry Meyerowitz. The combination of assets—which include
Allumination’s full-service distribution center in South Carolina—is
expected to result in a 30 percent cost reduction, as compared with the combined
companies’ overhead prior to the transaction. The merged outfit will have the U.S.
home-entertainment rights to more than 1,000 titles. Peace Arch will also
exploit all of the combined entity’s rights in the U.S. television and digital
market, and all acquired titles with Canadian distribution rights. Peace Arch
will also sell motion pictures acquired through the joint venture that are
intended for international theatrical release, and ContentFilm will sell any television,
direct-to-DVD and library titles acquired by the new venture in the
international marketplace.

Jeff
Sagansky, Peace Arch Entertainment Group’s CEO, said: “This merger will create one of the leading
independent home entertainment companies in the U.S. and will add significant
scale to Peace Arch’s worldwide distribution capabilities.”

John
Schmidt, ContentFilm’s CEO, noted: “We are delighted to be in business with Berry
and his well respected colleagues at Peace Arch Home Entertainment. The merger
is an extremely positive opportunity for both companies. The growth achieved by
Peace Arch over the last few years is a testament to the strength of its
home-entertainment division and we look forward to combining with Berry and his
team to make our jointly owned operation a thriving success.”

Last December, Peace
Arch announced it was in negotiations to acquire London-based ContentFilm, the
owner of Fireworks International. Three months after the letter of intent was
signed, the tentative deal was called off. Sagansky said at the time: “Given
both the turmoil in the credit markets and market conditions in general we have
decided not to make an offer to purchase the company.” ContentFilm’s majority
owner, Syntek Capital, meanwhile, said it was no longer pursuing a sale of its
stake. ContentFilm’s Board had said in a statement: “Given the strong prospects
for the company, shareholders’ best interests would be served by the company
remaining as an independent entity.”

—By Mansha
Daswani