Shares digital

Independent film and entertainment content business, Entertainment One (ETO:AIM), has conditionally agreed to acquire RCV Entertainment and its subsidiaries for ?41.5 million (around £31 million) in cash.

RCV is an independent film distributor in the Dutch and Belgian markets, with its core business being the acquisition and exploitation of independent motion pictures in Holland and Belgium. RCV owns almost 2,000 titles which are made up of independent Hollywood titles and local-language content. Titles include The English Patient, Kill Bill, Blade II and Chicago.

The group focuses on independent films from leading US and international studios including New Line, Focus and Lions Gate, as well as locally produced independent films. Through the acquisition, Entertainment One, which floated last March, will become one of the largest independent film distributors by number of territories, with significant operations in the UK, Canada, USA, Holland and Belgium.

Entertainment One also owns Koch Entertainment, which is the largest independent record label in North America and has artists ranging from The Wiggles to Snoop Doggy Dog. This latest deal follows in the footsteps of last July’s acquisition of UK-based Contender Entertainment Group, and August’s purchase of Canada-based Seville Pictures.

RCV’s acquisition is expected to be earnings enhancing in the current financial year and Entertainment One says the purchase will further establish its position as a multi-territory film distributor and widen its reach.

The deal is being funded via a senior debt facility, the issue of exchangeable loan notes and a placing of 2.9 million new shares at 103.5p a share, which has raised £3 million. The shares ticked up to 104p.

Shares says: Early days still, but the group is expanding well and holds bags of potential.