TORONTO, June 26 /CNW/ - EdgeStone Capital Partners ("EdgeStone"), one of
Canada's leading private equity firms, and GS Capital Partners ("Goldman
Sachs"), a private equity affiliate of Goldman Sachs & Co., today announced
that a new acquisition company, established by EdgeStone, has entered into a
definitive agreement (the "Agreement") with Movie Distribution Income Fund
(the "Fund") (TSX: FLM.UN) to acquire (the "MPDLP Sale Transaction") the
Fund's 49% indirect interest in Motion Picture Distribution LP ("MPDLP).
Ultimately it is anticipated that a company controlled by EdgeStone will own
the business carried on by MPDLP following the sale of Alliance Atlantis
Communications Inc. ("Alliance Atlantis"), which indirectly owns the other 51%
interest in MPDLP, pursuant to a previously announced agreement entered into
on January 10, 2007 (the "Alliance Atlantis Acquisition") and the MPDLP Sale
Gilbert Palter, Chief Investment Officer and Managing Partner of
EdgeStone said, "We look forward to providing additional funding and strategic
support to help Motion Picture Distribution capitalize on its many growth
opportunities and continue to offer the superior Canadian content for which
the company is known."
"We are entirely committed to ensuring that Motion Picture Distribution
continues to play its important cultural role in Canada, to ensuring an
experienced and dedicated management team, and to strengthening the company,"
added Sandra Cowan, a Partner at EdgeStone.
GS Capital Partners will have an equity interest in the acquiring
The net proceeds of the sale of the Fund's interest in MPDLP equate to
C$10.00 per outstanding unit of the Fund ("Fund Unit"), which will be used by
the Fund to redeem all outstanding Fund Units for C$10.00 per unit following
completion of the MPDLP Sale Transaction.
The consideration to be received by Fund Unitholders represents a premium
of approximately 30% to the 20-day weighted average trading price of the Fund
Units on the TSX prior to October 20, 2006, the date of the formation of
MDIF's special committee to consider the implications of Alliance Atlantis'
announcement to explore ownership alternatives for its 51% interest in MPDLP,
and a premium of approximately 10% to the weighted average price for the 20
trading days of the Fund Units ending June 25, 2007 (being the last trading
day prior to the announcement of the MPDLP Sale Transaction).
The MPDLP Sale Transaction is subject to customary closing conditions,
including approval by two-thirds of the votes cast by Fund Unitholders at a
meeting to be held on August 3, 2007. The Fund has set July 4, 2007 as the
record date for determining Unitholders entitled to receive notice of and vote
at such meeting. A notice of meeting and circular describing the proposed
MPDLP Sale Transaction will be mailed shortly. The MPDLP Sale Transaction is
also conditional on the closing of the Alliance Atlantis Acquisition and is
expected to close contemporaneously with the Alliance Atlantis Acquisition in
early August, 2007. As part of the transaction, four of the Fund's largest
unitholders (together with entities controlled by them) being Goodman &
Company, Investment Counsel Ltd./Dynamic Funds, TD Asset Management Inc.,
Gluskin Sheff + Associates Inc. and Lawrence Asset Management Inc., together
representing approximately 30% of the Fund Units, have agreed to vote their
Fund Units in favour of the MPDLP Sale Transaction.
Based upon the recommendation of the Fund's Special Committee comprised
of Mr. Rubin Osten and Mr. David Richards, the Fund's Board of Trustees has
unanimously determined that the MPDLP Sale Transaction is fair to Fund
Unitholders and is in the best interests of the Fund and unanimously
recommends that Fund Unitholders vote in favour of the MPDLP Sale Transaction.
The Fund's financial advisor, CIBC World Markets Inc., has provided an opinion
to the Board that the consideration payable to Fund Unitholders under the
MPDLP Sale Transaction is fair from a financial point of view to Fund
"After these many months, we are pleased to be able to obtain for our
unitholders a liquidity alternative at fair value for their Fund units," said
Mr. Osten, Chair of the Fund's Special Committee.
Under the Agreement, the Fund has agreed to customary "non-solicitation"
and "right to match" provisions and to pay a break-fee of C$5 million to the
acquisition company under certain circumstances. The Fund has also provided
its consent to the proposed transfer by Alliance Atlantis of its interest in
MPD to EdgeStone and Goldman Sachs in connection with the Alliance Atlantis
Acquisition on certain specified terms and, accordingly, the parties will be
abandoning their related Court proceedings.
About EdgeStone Capital Partners
EdgeStone is one of Canada's leading private equity firms and has managed
in excess of CDN$2.3 billion of private capital on behalf of institutional and
high net worth clients. EdgeStone provides capital, strategic direction and
business and financial advice to help promising mid-market and early-stage
companies achieve their full potential. EdgeStone leverages the resources of
its broad business network and ensures an alignment of interests to achieve
superior returns for all stakeholders. EdgeStone is one of the principal
entities of the GMP Capital Trust group (TSX: GMP.UN).
About Goldman Sachs Capital Partners
Founded In 1869, Goldman Sachs is one of the oldest and largest
investment banking firms. Goldman Sachs is also a global leader in private
corporate equity and mezzanine investing. Established in 1991, the GS Capital
Partners Funds are part of the firm's Principal Investment Area in the
Merchant Banking Division, which has formed 13 investment vehicles aggregating
$56 billion of capital to date.
About Motion Picture Distribution LP and Movie Distribution Income Fund
Motion Picture Distribution LP (the "Partnership") is a leading
distributor of motion pictures in Canada, with a presence in motion picture
distribution operations in the United Kingdom and Spain. The Partnership
distributes filmed entertainment to theatres, on video and DVD, and to
television broadcasters. Alliance Atlantis Communications Inc. (TSX: AAC.A,
AAC.B) indirectly holds a 51% ownership interest in the Partnership and Movie
Distribution Income Fund (TSX: FLM.UN) indirectly holds the remaining
ownership interest in the Partnership.
CIBC World Markets Inc. is acting as financial advisor to the Fund.
Stikeman Elliott LLP is acting as legal counsel to the Fund.
This press release includes forward-looking statements, which are based
on certain assumptions and reflect the current expectations of Movie
Distribution Income Fund (the "Fund") and the Partnership. Forward-looking
statements are those which are not historical fact and include, but are not
limited to, statements of the Fund's or the Partnership's expectations and
intentions. The reader should not place undue reliance on them. They involve
known and unknown risks, uncertainties and other factors that may cause them
to differ materially from the anticipated future results or expectations
expressed or implied by such forward-looking statements, including among other
things whether the MPDLP Sale Transaction will be completed, whether on the
terms currently contemplated or otherwise. Important factors that could cause
actual results to differ materially from those set forth in the
forward-looking statements include: a change of control of Alliance Atlantis,
audience acceptance of our filmed entertainment, our relationship with filmed
entertainment content suppliers; the loss of key personnel, technological
change that increases competition or facilitates the infringement of our
intellectual property, changes to the regulatory environment, actions of our
competitors and changes in the general economy. Additional information about
these factors and other factors are described in materials filed by the Fund
with the security regulatory authorities in Canada from time to time,
including the Fund's and the Partnership's Management's Discussion and
Analysis ("MD&A") for the year ended December 31, 2006 and for the period
ended March 31, 2007. Neither the Fund nor the Partnership undertakes any
obligation to publicly update or revise any forward-looking statements or
information, whether as a result of new information, future events or
For further information:
For further information: EdgeStone - Samuel L. Duboc, President and
Managing Partner, (416) 860-3760; Sandra Cowan, Partner, (416) 860-3770,
www.edgestone.com; Movie Distribution Income Fund - Lloyd A. Wiggins, Chief
Financial Officer, (416) 966-7266, firstname.lastname@example.org