Technicolor Expands In Canada With Acquisition Of AstralTech

5-May-00

Technicolor, the world's leading film print, videocassette and DVD production and distribution company, announced that it has acquired AstralTech, Canada's second largest producer of videocassettes for a total consideration of $17.5 million in cash. Technicolor has purchased AstralTech's videocassette production and distribution operations in Canada from parent company Astral Media Inc. The deal includes AstralTech's production and distribution facilities in Montreal (437,500sq. ft.) and satellite distribution facilities in Toronto (83,000sq. ft.) and Calgary (61,000sq. ft.). Technicolor plans to consolidate its existing Toronto-based Canadian operations into the AstralTech facilities. Lanny Raimondo, CEO of Technicolor, said, ""Technicolor is driving the packaged media industry right across North America. AstralTech is a well-managed company with a sound manufacturing and distribution infrastructure that immediately expands Technicolor's ability to serve the growing Canadian marketplace."" The acquisition will enable Technicolor to build its share of the North American video rental and sell-through market as well as its distribution capacity. Technicolor's Canadian operation will now have the capacity to produce over 45 million videocassette units a year. Technicolor is now positioned to become one of Canada's leading DVD packaged media manufacturers. While near-term DVD manufacturing will be performed out of Technicolor's U.S.-based facilities, AstralTech has the infrastructure to support further growth and expansion into DVD. According to market research, demand for DVDs is forecast to grow by almost 70 percent (1) in North America over the coming year. In addition to adding significant VHS manufacturing capacity, the AstralTech acquisition provides Technicolor with immediate access to an experienced direct-to-retail distribution operation. This capability offers the turnkey production-through-distribution services that large studios and independent rights holders increasingly demand to deliver their packaged media products to the marketplace. Andri Pagotto, AstralTech's General Manager, said, ""We are bringing together AstralTech's regional production and distribution capabilities with Technicolor's global market strength and leadership in both VHS and DVD formats."" AstralTech will now form part of Technicolor's Packaged Media Group, the company's largest division comprising video manufacturing, optical manufacturing and distribution operations. Technicolor is a wholly owned subsidiary of Carlton Communications Plc, and has evolved as the number one processor of motion picture film to become the world's largest independent manufacturer and distributor of videocassettes, DVD-Video, DVD-ROM, CD-ROM and CD audio. On an annualized basis, the company has the capacity this year to produce in excess of 800 million videocassettes, 150 million DVDs and 500 million CDs. Technicolor serves an international base of entertainment and software customers with its facilities in Michigan, California, Ohio, New Jersey, New York, Tennessee, Virginia, Mexico, Canada, Denmark, Holland, Italy, Spain, Luxembourg and the United Kingdom. Major Hollywood clients include Disney, Warner, DreamWorks and New Line. Software publishers include Microsoft and Hewlett Packard. (1) Source: InfoTech and Adams Media Research