AUG. 2 | DVD distributor Image Entertainment has acquired 19-year-old Chicago-based publisher/distributor Home Vision Entertainment.
The $8 million deal--one of the largest ever for Chatsworth, Calif.-based Image--also gives the former laserdisc company exclusive distribution rights to the prestigious Criterion Collection of esoteric, foreign and critically acclaimed movies on DVD.
For the past eight years, Image had split retail distribution of Criterion titles with Home Vision, which had a separate 50/50 joint venture with Criterion. With that arrangement, Image was never able to include Criterion titles in its overall national marketing efforts.
With this week's deal, Home Vision sells its 50% stake in the joint venture back to Criterion, freeing up Criterion to sign an exclusive output deal with Image for its 280 active catalog titles and three to four monthly new releases through 2010.
Image will now be able to mount full-fledged marketing campaigns for DVDs from Criterion, which is credited with creating the market for today's DVD bonus features and audio commentaries when the company first produced those features for laserdiscs in the '80s. Criterion licenses selected titles such as The Life Aquatic and Hoop Dreams from studios and producers, paying a royalty fee that is often comparable to the wholesale price realized by suppliers on the titles. The Criterion Collection contains approximately 280 active DVD titles in its library and typically releases three or four new titles each month.
The privately held Home Vision, which specializes in independent and foreign films on DVD such as the BBC production of The Chronicles of Narnia, the animated classic Animal Farm, Allegro Non Troppo and the George C. Scott starrer The Day of the Dolphin, had net revenue of $29 million last year on more than 130 active titles, according to the companies.
With the acquisition of all outstanding capital stock, Image is expected to eventually lay off about 40 of Home Vision's 45 employees and shutter Home Vision's Chicago headquarters and warehouse facility, consolidating those operations into its newly renovated facilities by the end of the year.
Home Vision's president and CEO, Adrianne Furniss, will remain as a consultant for three years, assisting with Image's consolidation and content acquisition efforts. Others will likely come from Home Vision's acquisition and production areas.
The Home Vision Entertainment name will remain as a label under which Image will continue to release new titles on a monthly basis.
Image execs believe the deal will allow the combined companies to realize at least $2 million in cost savings.
Image COO David Borshell said the company intends to use the deal as a springboard to make additional acquisitions, perhaps further expanding its re-entry into the fine arts and foreign film category as well as others.
"We have a physical and personnel infrastructure that we are in a great position to leverage," Borshell said.
"Now that the transaction has been concluded, we plan to intensify efforts to identify and pursue further opportunities," said Image president and CEO Martin Greenwald.
Criterion president Peter Becker said, "After well over a decade's experience with us and our brand, Image understands what The Criterion Collection means, both to our core customers and to the retailers who help us reach a wider audience."
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