Hi everyone,
I'm long on RNK and have been for a while. I've been in contact with Malcolm Earle who's the IR guy of RNK. He's asked me to tell anyone who's interested that he's happy to respond directly to any questions either by email or phone. I'm also posting an article that appeared in a Vancouver paper recently.
Malcolm's email is malcolm@rainmaker.com and his toll free number is 1-800-616-4433
Regards,
Karim
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Vancouver Sun - Friday July 10, 1998 - Business Section
Major leap for film industry
Corporate strength has always been one of the weaknesses of Vancouver
production industry, executive says.Reported by Joanne Morgan - Vancouver Sun
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Vancouver's film production industry took a major leap forward this week
when Western Canada's largest post-production facility, Rainmaker
Digital Pictures Corp., and Pacific Motion Pictures joined forces under
the newly-created umbrella of Rainmaker Entertainment Group.
Armed with a new name and a newly-acquired production arm, Rainmaker --
a public company traded on the TSE -- embarked on the first step of its
strategy to build and diversify beyond its core activities of post
production for film and television.
"This is an important sign of the maturation of the industry when you
see these kind of developments taking place," said Rob Egan, president
and CEO of British Columbia Film.
"Corporate strength has always been one of the weaknesses in the
Vancouver production industry. Our local companies are now realizing
they must position themselves with more sharply-focused business acumen
to capitalize and draw on a broader range of resources to compete
nationally and globally."
Roger Dent, investment media analyst with Yorkton Securities in Toronto
concurs.
"This is definitely another stage of consolidation in the entertainment
industry which across Canada and internationally is an increasingly
important theme."
As for share prices, Dent said: "in the short term the market has not
reacted in a big way but obviously in the long run -- over the next six
months to a year -- this is a very positive move and should help them
raise earnings."
Bob Cabral, CEO of Rainmaker Entertainment Group says the acquisition
was a way for REG to secure it's future as a public company by
diversifying its sources of revenue and building other types of assets.
"It also allows us to grow our core business with more predictability."
He says Rainmaker has been considering a variety of expansion
opportunities for some time but few local companies could meet all their
criteria.
"First, we wanted to be involved with a company that would grow B.C.'s
production industry and second, that any new venture we entered into
would complement our established post production business by offering
added value and increased opportunities to our clients."
Pacific Motion Pictures, one of Vancouver's leading production
companies, has produced more than 75 films with combined production
budgets in excess of $350 million since its formation in 1989.
Last January, New York-based Hallmark Entertainment, the world's leading
producer and distributor of miniseries and TV movies, purchased a
20-per-cent interest in PMP and entered into a development, production
and distribution agreement.
Under terms of the agreement with REG, 80 per cent of the shares of The
Railway Film Centre Ltd. (parent company of PMP) were sold for $483,129
in cash, 125,987 common shares of Rainmaker and 950,000 in special warrants.
As part of the Rainmaker deal, the principals of PMP, Tony Allard,
Matthew O'Connor and Tom Rowe have also each entered four-year
employment contracts.
"Hallmark's involvement with PMP gave us the confidence to execute the
first step in our expansion plans," Cabral said. "Having two players,
one with a very established distribution company and the other with a
very active production company, it's a great combination.
"This will allow us to predict our growth more by knowing well in
advance what plans for production Hallmark has."
Cabral also emphasizes this will not be an exclusive deal with PMP.
"We will also be looking at relationships with other production
companies. If this acquisition proves successful, it will likely provide
our other clients interested in breaking free of the production service
bind, to start developing more of their own projects, with new
opportunities as well."
In an attempt to allay fears in the production community of preferential
treatment for PMP, Cabral says PMP will continue to operate separately
from Rainmaker Digital Pictures as a wholly-owned subsidiary of
Rainmaker Entertainment Group.
"We certainly are not going to jeopardize our post-production business
with other producers just because we have a corporate relationship with
another production entity.
"Our relationship with PMP will remain as client, service provider and
will not affect our level of service or pricing to our other clients." - - -
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