Lionsgate Entertainment late Thursday made it official by announcing it will sell Maple Pictures to rival Canadian film distributor Alliance Films for $38.5 million.

The deal, which will see Victor Loewy’s Alliance Films acquire Maple Pictures and its film library, marks a dramatic reversal in fortunes for the two Canadian distributors.

Five years ago, when the indie film distribution game knew better times, Loewy was fighting a bitter corporate battle for control of then Motion Picture Distribution, a struggle that ended a year later when Goldman Sachs bought the company and re-launched it as Alliance Films.

Also in 2006, Maple Pictures founders and co-presidents Laurie May and Brad Pelman had major ambitions running a Canadian indie distributor spun off by Lionsgate a year earlier.

May and Pelman’s strong starting hand included a supply deal to release Lionsgate’s film and TV product in Canada.

And as part of a corporate saga with more twists than a soap opera, Maple Pictures looked on while Loewy faced his ownership turmoil at MPD to pick off his long-standing output deals with Miramax, New Line Cinema and other studio suppliers when they came up for renewal.

In 2008, May and Pelman signed an exclusive output deal with Miramax after that U.S. studio’s long-term arrangement with Alliance Films was not renewed at the end of 2007.

But fast forward to March 2011 and Maple Pictures was out of the picture again as Miramax renewed its Canadian pact with Alliance Films.

May and Pelman and the rest of Loewy’s Canadian rivals had come up against a hard industry reality: Alliance Films has a lock on most of the plum output deals in the Canadian market.

Loewy’s the main and constant Canadian link to Hollywood suppliers.

With the Maple Pictures deal, Alliance Films can now add Lionsgate to existing supply deals with Relativity Media, Focus Features, The Weinstein Company, CBS Films, FilmNation Entertainment, IM Global, Mandate, Wild Bunch and a host of other distributors.

Maple Pictures, on the other hand, besides its output arrangement with Lionsgate, in recent years found itself without major supply deals to feed its Canadian pipeline.

The result has seen Alliance Films come through a recent industry shakeout as a bigger, diversified player, while Maple Pictures has been sold after Lionsgate concluded it was a peripheral asset that needed to be sold for cash to shore up its own balance sheet.

The Maple Pictures sale will see May and Pelman make the move to Alliance Films.

The joint release issued by Lionsgate president and co-COO Steve Beeks and Alliance Films president Charles Layton made no mention of other Maple Pictures staff and whether they will be retained by their new owner.

The sales agreement also calls for Alliance Films to take on Maple’s exclusive five-year output deal with Lionsgate for the Canadian distribution of the indie studio’s movie and TV product and the exploitation of Lionsgate’s filmed entertainment library in Canada.

“We’re delighted to partner with Alliance, an iconic brand in the Canadian filmed entertainment business, in a long-term relationship that assures that our product will be handled by an experienced team with unparalleled knowledge of the Canadian marketplace,” Lionsgate’s Beeks said in a statement.

“This transaction combines two extraordinary distributors in Canada and strengthens the distribution infrastructure we offer to our content partners,” Alliance Films’ Layton said in his own statement.

The Maple Pictures acquisition by Alliance Films is subject to Canadian regulatory approvals.