Vancouver: After at least two years of courting and one misstep down the aisle, two of Vancouver’s production community leaders finally tied the knot July 7.

Newly renamed Rainmaker Entertainment Group – operator of Western Canada’s largest post-production company – acquired 100% of busy production company Pacific Motion Pictures in a cash-and-stock deal worth $2.4 million at the time of the announcement.

pmp’s owners Tony Allard, Matthew O’Connor and Tom Rowe – through parent company Railway Film Centre – will sell their 80% stake for $483,129 and 125,987 common shares of Rainmaker.

As part of the package, they also receive a revenue incentive of 950,000 special warrants that can be earned over six years and are based on surpassing pretax earnings targets. Each of pmp’s principals has entered into a four-year employment agreement with Rainmaker.

Hallmark Entertainment, a leading producer and distributor of miniseries and television movies, has also sold its recently acquired 20% stake in pmp to Rainmaker for 256,410 common shares of the company and 128,205 share purchase warrants.

Hallmark invested in pmp in January and it is unclear what, if any premium Hallmark realized through its sale to Rainmaker this month.

At deal-day prices, Hallmark’s sale was worth $974,000 in stock and the company will have one year to spend the $500,000 required to exercise the Rainmaker stock warrants.

Bob Cabral, Rainmaker’s ceo, says the acquisition will not affect the day-to-day business of pmp and sister post company Rainmaker Digital Pictures. No consolidations are planned.

He adds the two companies will operate at arm’s length and that, to avoid potential or perceived conflicts with Rainmaker’s existing client base, no preferential treatment will be paid to pmp or Hallmark in the provision of post or effects services in the future.

Moving into content, however, will create new profit centers for shareholders, says Cabral.

The specifics of the pmp-Hallmark deal in January provide for off-balance sheet development funds for new projects, limited production funding risk and distribution royalties through the licensing in Canada of Hallmark’s program library. pmp makes about $2.5 million to $3 million in service production fees alone per year.

About two years ago, a similar acquisition was attempted, but was scuttled because of a rumored disagreement regarding the board structure of the consolidated company. Cabral would not disclose the reasons why the original deal failed.

He is joined in the management of Rainmaker Entertainment by coo Bob Scarabelli, executive vp Allard (who remains chair and ceo of pmp) and cfo Mike Barnsley.

Rainmaker’s board of seven will make room for one new appointee from the acquisition who will be either the ceo or coo of Hallmark Entertainment.

And while Rainmaker is still sitting on $8 million in cash raised through the markets when it went public through a reverse takeover in May 1995, Cabral is tightlipped about other prospective acquisitions, saying only that Rainmaker is or has been in talks with other production companies in Vancouver and elsewhere.

During a conference call with market analysts July 8, Rainmaker predicted that the pmp acquisition would lead to a $560,000 improvement in earnings (or a five cents per share earnings premium) in 1999. Through the acquisition, pmp and Hallmark have a combined ownership of about 2.5% of Rainmaker’s 11.2 million outstanding shares.

Shares on the Toronto Stock Exchange remained unchanged at $3.80 on July 8.