WGIM Acquisition Corporation, whose principal shareholders are U.S. executives Bradley Wechsler and Richard Gelfond, is the new front-runner in the bid to buy Toronto-based Imax Systems Corporation. If Investment Canada approves the sale, Jonathan Barker, Imax’s vice-president of film, says the company anticipates a public offering both in Canada and the U.S. later this year.

wgim topped former U.S. theater owner Ted Mann’s bid last September to buy the Canadian company. ‘There was a provision in the Mann agreement that allowed us to accept another offer if it came. So nothing happened to Mann. It was a very friendly situation,’ says Barker.

Imax has been up for sale for several years now. The 25-year-old company, founded by Graeme Ferguson, Robert Kerr and Roman Kroitor, lacked sufficient capital to finance films and construct new theaters. In 1990, it went to the Canadian private sector to seek institutional or strategic investors, but came back empty-handed. The only solution, according to several imax-format producers, was to sell out to a U.S. firm.

‘The partners had taken the company as far as they thought it could go at this stage without a greater influx of capital,’ says independent imax producer Stephen Low. ‘The problem with Imax is that there aren’t enough theaters to drive the software production, and someone has to step in who is willing to take the stakes higher,’ he adds.

With its new boost of capital, Barker expects the Imax theater network to expand, but will not say by how much. ‘The network has been, in any event, expanding between 10 and 12 theaters a year. We are up to 104 now and we have got many more signed that are not yet opened,’ he says.

‘The founders of Imax were managing the business for security rather than growth and we thought a more aggressive management style would find new opportunities,’ says Gelfond.

Wechsler and Gelfond have signalled their desire to package giant-screen theaters/motion-simulator rides and interactive technology by purchasing Trumbell Company and its Ridefilm Theatres. Douglas Trumbell, owner of the two companies, is the special effects engineer who designed the large-format system Showscan, and is the producer of Universal Studio Theme Park’s Back to the Future…The Ride. ‘We thought with the increases in choice of in-home entertainment, people are going to demand a better out-of-home entertainment experience,’ says Gelfond.

One of the company’s goals is to attract new talent to the imax format. If the company is to grow, it needs more commercial product. But the catch-22 is that although stars and hot directors are needed to attract bigger audiences, distribution of commercial fare such as Rolling Stones – At the Max has been limited because many Imax theaters are located in museums which demand an educational component.

Gelfond says a more practical approach would have been to have a science movie starring Harrison Ford.

Although Imax is now in foreign hands, company headquarters will remain in Toronto and Barker doesn’t anticipate any fundamental changes in the production of films. ‘We will continue to produce (ourselves) and collaborate with independent producers,’ he says.

Low, who received financing from Telefilm Canada for his film Titanica, does not believe the sale of the company to Americans will impede independent filmmakers’ ability to raise public funds for imax-format projects. ‘Who owns the hardware is irrelevant,’ he says. In fact, in the past 10 years, the only project to get money from Telefilm Canada has been Titanica.

In principle, Low is not opposed to the sale: ‘The struggle ahead for Imax is so enormous. In order to establish itself as a standard, it’s going to need Hollywood and high investment capital. It must involve the whole film industry, and thus to have it in Canadian hands is unrealistic,’ he says.

Barker expects Investment Canada to rule on the buyout within a month. The deal, including the acquisition of Trumbull’s companies, which would become Imax subsidiaries, is rumored to be in the neighborhood of us$100 million.

Wechsler will be interim ceo until an executive search is completed. KM