Another

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Vancouver: Following in the footsteps of a growing number of entertainment-related companies that have gone public of late, Vancouver-based Rainmaker Digital Pictures Corporation, parent company of Gastown Post, Gastown Labs, Rainmaker Interactive and Rainmaker Imaging, launched its new corporate entity on the Montreal Stock Exchange, trading under the rnk symbol.

Rainmaker is currently in the process of doing a private placement offer of Rainmaker common shares with investment brokers Capital West Partners to raise a maximum of $7 million.

Gastown Post, established in 1979, was Western Canada’s first digital post-production facility. Gastown Labs was formed in 1987, and Rainmaker Imaging and Rainmaker Interactive were created in January of this year. In March, the four companies were merged into Rainmaker Digital Pictures.

The Rainmaker companies are the brainchild of Bob Scarabelli, a former Gastown manager and now president of Rainmaker. Rainmaker Imaging offers high-resolution imaging, digital compositing, computer animation and special effects for the motion picture industry; Rainmaker Interactive provides technical and development services to interactive multimedia producers.

All four companies will continue to operate as independent entities, each with its own management and operating staffs.

Rainmaker cfo Tom Locke says the decision to go public was motivated by the new Rainmaker companies, which had already planned to go public but needed a strategic alliance with a film lab and post house.

‘We thought, why not put all the companies together under one roof and take the whole thing public because we share the same client base and it would give us greater credibility.’

For the partners in Gastown, he says, it presents an opportunity to make their investments in the company more liquid.

Locke says they bypassed the local Vancouver Stock Exchange in favor of the mse because they had an opportunity to do a reverse takeover of an existing company already trading on the Montreal exchange. Rainmaker is also exploring the future possibility of listing on nasdaq in the u.s.

Locke predicts the increasing melding of the motion picture and computer industries will require new computer solutions for the entertainment marketplace. ‘Going public will allow us to develop some of those solutions. We believe this is a an underserved niche in the market.’

He adds the injection of new capital into the company will enable Rainmaker to pursue further acquisitions and escalate its r&d activities in the interactive domain.

On the acquisition front, Locke says, ‘to compete globally companies need good, strong international ties, so we will be looking both east and south for businesses working in compatible areas to Rainmaker.’

The area of sound post-production, he says, would be a particularly good fit with Rainmaker and increase its vertical integration strategy.

Locke also hints that the new public entity could position Rainmaker for acquisition by a larger multinational corporation with similar aspirations in the entertainment industry.

‘We certainly haven’t set up Rainmaker for that purpose but anything’s possible. More people are starting to notice what’s going on in the technological environment, and lately we’ve been approached with a lot of interest from numerous other companies.’

Earlier this spring, Rainmaker signed a strategic alliance with electronics giant, Phillips Interactive Media Centre in Hasselt, Belgium to be the sole company in North America licensed to use Phillips’ MPEG-1 compression system (reputed to be one of the best digital compression systems in the world and a key component in the transfer of visual information onto new multimedia formats).

In addition to doing upgrades to the mpeg system, Rainmaker will also be a Beta testing site for future developments of a Phillips/Silicon Graphics turnkey solution using mpeg compression technology.

‘Some of the technology we are developing in our Rainmaker companies can be used in other mediums,’ says Locke. ‘The beauty of this is that it opens up whole new areas of non-traditional markets for us.’

As examples, he says, Rainmaker has already spoken with at&t about using the mpeg system for the transmission of information along fiber-optic lines, and Xerox is also interested in the compression system as a possible solution for some of its clients.

Scarabelli says Rainmaker will still focus primarily on servicing other producers’ productions but it will also do its own multimedia productions.

‘I’m a firm believer that the days of being a pure service company are short-lived. Now companies need to take a more active participation in the products they are servicing – be that through revenue sharing or partnering or publishing,’ says Scarabelli.