Montreal: Behaviour Communications and Icestorm Digital have terminated their August ’99 agreement providing for Icestorm’s 100% acquisition of Behaviour Digital Studio. The $500,000 deal was slated to close Sept. 20.

Icestorm president John Poisson says the agreement’s demise has not altered expansion plans, and Icestorm expects to make a major production and development announcement in the next week or two.

Behaviour says it had extended the deadline on three occasions, but Carole Beaucage, senior director, finances at Behaviour, says Icestorm was unable to provide sufficient financial information to gain approval from lenders. ‘[Icestorm] gave us a new offer just before Christmas, but there were too many conditions, so we killed the deal,’ she adds.

Poisson says the uncertain status of a $9-million federal government loan facility to Behaviour was one of the main stumbling blocks.

Icestorm specifically wanted access to the unspent portion of the loan facility, about $8 million. ‘As we advanced further and further we weren’t able to gain any level of security on that, and that was part of what made the deal interesting,’ says Poisson. ‘It got to a point where the prospect of refinancing all the debt [of Behaviour Digital] was either, or both, too complicated or too costly.’

Poisson says he has some concern for Behaviour Digital’s 12-person team, who were slated to join the 45 staffers at Icestorm. ‘Without their [Behaviour’s] hardware, we’re simply going to buy the same kinds of hardware,’ he adds.

Behaviour says it intends to continue to operate its digital studio and will evaluate its alternatives over the next few months.

Icestorm produced the visual special effects for the hdtv series The Adventures of Jules Verne, a Canada/u.k. coproduction sold in Canada to cbc. Neil Dunn is ceo of Icestorm Entertainment Group, a subsidiary of Flashpoint, one of the largest private financiers of film and tv production in the u.k.