Deluxe has entered into an agreement with Rainmaker Income Fund to acquire Vancouver-based Rainmaker Visual Effects and Rainmaker Post, along with Rainmaker's London vfx facility. It will not include the Rainmaker Animation division based in Vancouver, which will continue to belong to Rainmaker Ent.
The total purchase consideration will be payable as follows:
* $14 million in cash on closing;
* $2.5 million by way of a promissory note due one year after closing;
* $6 million earn-out based on revenue targets;
* $3.5 million assumption of capital leases; and
* $5 million Deluxe service credits available to Rainmaker Animation operations.
Closing is subject to the approval of Heritage Canada and to certain other customary closing conditions. The transaction is expected to be completed on Dec. 31.
The sale to Deluxe will allow Rainmaker to concentrate solely on family-oriented 3D animation and content ownership. Rainmaker, which previously acquired Mainframe and currently has a staff of 350, is in production on ESCAPE FROM PLANET EARTH, a theatrical feature film for The Weinstein Co., and in development on a 3-D stereoscopic feature film trilogy based on REBOOT, Rainmaker's classic television series.
Deluxe has been strategically adding to its slate of companies worldwide. Extending its laboratory, post-production and visual effects capabilities to Vancouver and expanding to high-end visual effects resources in London, is the next logical step. With its many long-standing customer relationships, the acquisition of Rainmaker is ideally suited for Deluxe to better serve its client base in Vancouver and London.
"Rainmaker is a perfect fit for Deluxe. This acquisition will only enhance the stature of the industry in Vancouver," said Warren Franklin, CEO of Rainmaker. "The completion of the sale to Deluxe will allow Rainmaker Ent. to fully focus on becoming a world leader in computer animated films and to accelerate the development of its own film properties. Vancouver, with its strong talent pool, excellent training facilities and robust industry incentives is poised to be at the forefront of digital technology and creative growth."
"We are excited to be acquiring one of Canada's leading postproduction facilities. Entering the Vancouver market is a natural extension for us and who better to do it with than Rainmaker," said Cyril Drabinsky, CEO and president of Deluxe. "Clients shooting in Vancouver will now have the choice of processing or digitizing their dailies locally with Deluxe before completing their projects through any one of Deluxe's film and digital finishing facilities worldwide."
Rainmaker (www.rainmaker.com) has grown into one of North America's pre-eminent post-production service providers. Rainmaker has three divisions -- Rainmaker Animation, Rainmaker Visual Effects and Rainmaker Post. Rainmaker also operates a facility in London -- Rainmaker Animation & Visual Effects UK Ltd. (Rainmaker UK).
Deluxe Entertainment Services Group Inc. (www.bydeluxe.com), a wholly-owned subsidiary of MacAndrews & Forbes Holdings Inc., is a leading provider of a broad range of entertainment industry services and technologies to major Hollywood studios and an international client base. Services include motion picture film processing, printing and distribution; EFILM digital intermediates; post production and subtitling services; titles design and digital VFX; DVD compression, encoding and authoring; digital cinema services, digital asset management, digital distribution; and marketing fulfillment services. Deluxe facilities include: Los Angeles, Toronto, London, Rome, Florence, Madrid, Barcelona and coming soon to New York.
From VFX World...
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