Entertainment One looks to be new Alliance Atlantis

If Entertainment One’s proposed $51 million cash and stock deal to acquire Blueprint Entertainment, Barna-Alper Productions, Oasis International and Maximum Films goes through, it will be the latest and most significant move in a yearlong drive toward greater diversification for the budding distribution powerhouse.

The deal, which requires shareholder approval, calls for $21.9 million in cash and $29.7 million in company shares to be paid out among the principals of the four private companies.

‘These acquisitions allow us to expand into Canadian television programming and diversify our revenue base into a unique industry which enjoys a favorable financing environment and is highly exportable,’ says Darren Throop, CEO of E1.

The proposed merger also includes bonus payments based on the future performance of Barna-Alper, Blueprint and Oasis after their acquisition.

E1 president Patrice Théroux, who will oversee the new TV assets as part of his filmed entertainment umbrella, says Barna-Alper and Blueprint are independent prodcos that can entice North American broadcasters with programming that quickly becomes sellable worldwide.

Also at play is a wish by all players involved to recreate a Canadian TV distribution powerhouse in the mold of the former Alliance Atlantis Communications.

‘Entertainment One is about content ownership and distribution and infrastructure. These deals allow us to diversify from purely film distribution, and gives us an opportunity to replicate the success of Alliance Atlantis,’ Théroux explains.

Laszlo Barna, who founded Barna-Alper in 1980, says he will give up his long-coveted independence for the security of having a powerful Canadian distributor once again.

‘When [Barna-Alper] started, there was Alliance Communications, and that enabled me to become a company,’ Barna explains.

‘All the way through Blue Murder and [Da Vinci's Inquest], my career was a succession of partnerships with Alliance, and then Alliance Atlantis. They deficit-financed us, sold our product around the world. And since they left the scene, there’s been no one,’ he adds.

Or, as Oasis International’s Peter Emerson tells it, foreign players such as BBC Worldwide, Fremantle International Distribution and Granada International have in recent years preyed on Canadian producers for lack of a homegrown alternative.

‘We need to increase our capital base to compete with these guys. It seems to be a bottom-line equation — who can put up the most money for all these rights,’ he says. ‘For now, it’s turning on the money and being able to cover the deficits on these programs and compete with our foreign competition.’

In acquiring movie distributor Maximum Films, E1 completes the merger begun earlier this year by Maximum and Seville Entertainment, and secures additional film output deals.

What E1 has also done is secured Maximum founder Robert Lantos’ sale of his stakes in each of the four private companies acquired.

‘The driver is the TV companies, which along with Maximum, are coming together — all merged into a single entity,’ Lantos explains. ‘This created an opportunity that we all felt comfortable with to get to where we want to go, and to do it on an accelerated basis.’

TV is certainly where the profits are when it comes to E1′s purchases. In the year ending Nov. 30, 2007, Barna-Alper reported $13.5 million in revenues and a gross profit of $5.9 million, according to regulatory filings released Monday by E1.

Blueprint reported revenues of $32 million and a gross profit of $8.6 million for the year ending Jan. 31, 2008, while Oasis posted $8.72 million in revenues and a gross profit of $2.64 million in the nine-month period ending Jan. 31, 2008.

Only Maximum has lost money as it has gotten off the ground. From its launch in 2007 to February 2008, Maximum Film Distribution reported an unaudited net loss of around $1.1 million on investment in film properties of around $4 million, according to E1. During the same period, Maximum Film International posted a loss of around $1 million on film property investments of around $600,000.

The leading principals of all four companies will remain with E1 via service agreements or as directors.

Blueprint’s John Morayniss becomes CEO of a newly configured TV group, reporting to Théroux. Barna becomes president of TV production, while Emerson will serve as president of international TV distribution, both reporting to Morayniss.

Blueprint cofounder Noreen Halpern becomes president of U.S. TV production, based in Los Angeles.

Over at Maximum, Bryan Gliserman and Charlotte Mickie will remain as senior executives. Lantos will become a non-executive director of E1, which will release all of his Serendipity Point Films titles in Canada and selectively internationally.

Théroux predicts minimal job losses from the latest acquisitions, as there is little overlap between all four companies.

He adds that Maximum and Seville had already completed the merger of their backroom operations. In all, E1 anticipates around $1.5 million in annual cost savings by pushing product from Blueprint, Barna-Alper and Oasis through its multi-territory distribution network.