Vancouver: Lions Gate Entertainment has bought credibility, experience, legacy and a valuable library in its June 6 purchase of producer/distributor Trimark Holdings, say members of the British Columbia film industry.

The $50-million deal – comprising cash, Lions Gate stock, plus the assumption of Trimark’s debt – was confirmed a week after news of negotiations between the two companies was leaked to the media. When the transaction closes, Trimark will be merged into a new wholly owned subsidiary of Lions Gate.

On the Toronto Stock Exchange, Lions Gate shares traded up $0.15 to $3.85 on strong volume of 27,000 prior to the stock being halted late Tuesday, June 6.

Trimark’s nasdaq-listed shares enjoyed a much better ride on the merger speculation, jumping nearly us$3 per share to us$8.94 on May 30 on volume of 657,000 shares. On deal day, the stock closed up $0.22 to us$8.22.

‘This is very good news,’ says Vancouver producer Ogden Gavanski, who has worked with Trimark twice in the past year. ‘It means Lions Gate is making all the right moves toward being an ongoing production and distribution entity in Canada. The two companies fit together really well.’

As co-owner of Milestone Entertainment in Vancouver, Gavanski was the line producer for the Trimark feature Turbulence II: Fear of Flying. Trimark’s distribution arm will handle Milestone’s new action feature The Gateway, which is in editing. He predicts the deal will mean more production for Vancouver from Trimark, which already has a strong presence in Canada.

Trimark is set to produce the feature Pumpkin, the story of a sorority girl who falls in love with a Special Olympian, in Toronto this summer and is expected to distribute the Navy Seal adventure feature Wet Works, an Ontario/b.c. coproduction.

‘Their abilities are complementary and Lions Gate has bought experience and access to certain markets [through Trimark’s well-established distribution division],’ adds Gavanski. ‘Strengthening their position in the international marketplace is essential.’

‘This is one of those deals where Lions Gate is buying real assets,’ says B.C. Film Commissioner Mark DesRochers. ‘The company is putting its money where its mouth is and expanding. The [Trimark] library is a real value.’

Under the merger agreement, lge will pay us$4.50 in cash and two of its own shares – a total of at least us$10 per share – for each Trimark share.

Jon Feltheimer retains his position as chief executive of lge and shares vice-chair duties with Trimark’s chairman and ceo, Mark Amin, who is also appointed to lge’s board.

‘This merger is the first step in the strategy we have laid out to grow the company through acquisitions and consolidations,’ says Feltheimer in a press statement. No one at Lions Gate, including its Los Angeles pr firm Rogers & Cowan, would answer calls at deadline.

‘The fit between Lions Gate and Trimark is ideal,’ says Feltheimer. ‘Trimark has a strong video operation with excellent vendor relations, a library of over 650 films, an active broadband operation and a great track record for producing and distributing specialty and genre films.’

Adds Amin: ‘We intend to exploit the many synergies between our two companies to form a formidable independent film studio, which will be a viable competitor in the motion picture industry. This transaction provides the opportunity for significant growth in all areas of our current business model.’

The two companies currently have combined annual revenues approaching us$300 million.

Among the assets acquired by Lions Gate Entertainment in its us$50-million purchase of Trimark Holdings are:

* Recent Trimark Pictures theatrical features including Beautiful People, The Last September and Held Up.

* Upcoming theatrical releases including Skipped Parts (starring Jennifer Jason Leigh, Brad Renfro and Drew Barrymore), the Blair Witch-inspired The St. Francisville Experiment, and Rules of Attraction (aka Stalk, featuring Gretchen Mol, Samantha Mathis, Tom Everett Scott and Matthew Settle).

* Trimark Home Video with its new first-look output deal with nbc, whereby Trimark can distribute many of nbc’s mows and other programs such as Saturday Night Live on home video. Also, the home video division recently acquired the vhs and dvd rights to the cbs miniseries Jesus, which will hit store shelves July 25; and,

* Trimark Pictures’ majority ownership of the website CinemaNow (www.cinemanow.com), which links independent filmmakers to independent film watchers.

www.lionsgate-ent.com

www.trimarkpictures.com