Entertainment One cleared for acquisition

03/01/2013 Harriet Russell

The stars of 'Twilight' at the Berlin premiere.

Film and television company Entertainment One (LON:ETO) has received clearance to move ahead with its acquisition.

eOne first announced its intention to acquire Alliance Films for CAD$225 million (£144 million) back in September 2012 but at the time also warned that one of the conditions was clearance from the Canadian Competition Bureau. Today, the company has confirmed that the applicable waiting period has expired and it is now clear to move ahead with the deal.

Alliance Films currently distributes its products to Canada, the UK and Spain, and the acquisition is expected to make Entertainment One the largest independent film distributor in the Canadian and UK markets.

Alliance's film library includes some well-known commercial titles including Pulp Fiction, Good Will Hunting, The Lord of the Rings and The King's Speech. However, together the newly enlarged group will enjoy a combined library of more than 35,000 film and television titles.

The company is expected to fund the acquisition through a combination of the proceeds received from a previous placing (£110 million) and funds available under its revised facility. A cash payment of $174.2 million is expected, with the remaining balance going towards paying down net debt.

Entertainment One recently had a box office hit on its hands with the fourth and final instalment of the Twilight series, which made £15.9 million in its first three days of release in the UK. Shares in Entertainment One were up 9.5p at 181p this morning, valuing the company at £495.1 million.