Montreal: Covitec Group and Covitec’s principal shareholder Astral Media have announced an agreement to sell 100% of Covitec’s shares to Technicolor, the Camarillo, California-based visual packaged media company.

The total acquisition price is approximately $60 million or $0.80 a share. Astral reports it signed a lock-up agreement to sell its 63.15% in Covitec to Technicolor, representing proceeds of $36.1 million.

A committee of Covitec’s board has retained Desjardins Securities to evaluate the offer. Both buyer and seller expect to mail an offer and accompanying bid circular to shareholders within 10 days. If the agreement is terminated, under certain conditions, Technicolor would be entitled to a $2.8 million termination fee.

Covitec (CTK-T) operates a film lab, studios, production and post-production services in Montreal, Ottawa and Quebec City, and has 370 employees.

The company reported net profits for the first half of fiscal 2000 of $1.2 million or $0.02 per share on top-line revenues of $31.1 million. Once the transaction is complete, Covitec will operate as a separate division of Technicolor, with Claude V. Gagnon staying on as president and ceo.

In April, Technicolor acquired the AstralTech Video Duplication Centre in Montreal for $26.5 million.

Technicolor is also committed to building a new $45-million film laboratory, with Montreal as the preferred, although unconfirmed, location. *

-www.covitec.com

-www.technicolor.com