EXCLUSIVE: I hear the deal was signed on Friday. So any moment now there’ll be an announcement that Canada’s Alliance Films President Charles Layton has finalized the purchase of his competitor Maple Pictures, which is primarily owned by Lionsgate. “But when you have Charles Layton involved in a deal, anything can happen!” a source tells me about the Alliance chief who’s been in the final due diligence stage. The deal has caused quite a lot of consternation up north because it will change the landscape of film distribution there — and for the worse, not the better. Also a bloodbath is expected: predictions are for the entire Maple staff of 30 to 40 employees to be let go with the exception of the two co-CEOs Laurie May and Brad Pelman, both former Lionsgate execs. Moving forward, Lionsgate’s films will be distributed by Alliance in Canada. This is part of Lionsgate’s divestiture plan to sell off what it considers non-core assets and raise cash to pay down debt following a year of fending of that hostile takeover attempt by corporate raider/shareholder activist Carl Icahn who planned to give LG to his son Brett. Lionsgate stock right now is still stuck in neutral, and the Maple stake is considered peripheral. (Lionsgate still maintains a distribution operation in the UK.)
Multiple sources tell me that Alliance is paying $38M for Maple. What Canada’s No. 1 indie film distributor is buying is an output deal with Lionsgate for Canada and the rights to the library, which is quite impressive, for a limited number of years — reportedly between 4-7 years. Lionsgate owns the vast majority of the economic interest in Maple (not just 10% as has been reported).“The structure was put in place to address the concerns of ‘Invest In Canada’ [the organization that promotes and attracts foreign direct investment into Canada] and the availability of different funding sources offered to Canadian-owned film businesses. Laurie May and Brad Pelman might own the voting shares but none of the economic interest,” one of my sources says. This now leave only two major Canadian film distributors, Alliance and eOne. Most recently, Smokewood Entertainment’s Judy Moody And The Not Bummer Summer was released by Maple in Canada and Relativity in the U.S. because of the two companies’ ongoing deal. Maple grew out of Lionsgate in 2005; it was known as Lionsgate Films before the unit was spun off.