Montreal: Post and production service company Groupe Cotivec is pursuing talks with Tele-Metropole aimed at the acquisition of Centre de Montage Electronique and Sonolab. Covitec has an exclusive two-week window to complete an agreement, after which time other bids will be entertained.

Covitec controller Marie-Josee Marsan says the company is confident the deal will go through. The acquisition price is expected to be in the $5 million to $10 million range, based on cme and Sonolab revenues.

Covitec is also talking to financing partner Capital cdpq, a Caisse de Depot subsidiary, which invested $500,000 in the company in early ’96. Financial analysts say Covitec would have to borrow up to 90% of the acquisition cost.

Industry sources speculate Supersuite, the city’s major post supplier on tv series, could also be part of a deal.

In late ’96, Tele-Metropole sold off its animation studio to producer Roger Heroux as well as PMT Video to Muriel Kearney and staffers.

cme is one of the city’s leading digital Rank film-to-tape transfer houses. It services commercials and tv series and operates profitable Flame and Inferno suites. The company has revenues of about $4 million a year and showed a profit of $750,000 in ’96, but Tele-Metropole has largely resisted spending on expensive equipment updates.

Sonolab offers film laboratory and sound dubbing services and has annual sales of between $5 million and $10 million. Sonolab is also believed to have broken even in ’96.

If acquired, cme would likely move, while a move may be uncompetitive for Sonolab.

Supersuite has upgraded its digital equipment inventory, and is believed to have broken even last year.

Listed on the mse, Covitec sales were close to $7 million for the 12-month period ending Aug. 31, 1996, up 39% from last year’s $5 million. Gross earnings reached $1.66 million while the company reported a net loss in ’96 of $460,275 or just over $0.04 a share, attributable to production planning problems early in the year and one-time acquisition and refurbishing costs, says ceo Claude Gagnon.

The company’s first-quarter performance points to a turnaround. Earnings totaled over $270,000 on a 14% sales increase to $2.33 million.

Last year, Covitec acquired United Imaging, now Covitec-Ottawa, a video equipment dealer, and Sonorisation Spectrum, a sound and video presentation operation now folded into Covitec-Eclair, the video post division.

Covitec is an equal partner with Moliflex/White in Studio Lasalle.