Vancouver's Rainmaker Income Fund (TSX:RNK.UN) is selling its post-production and visual effects operations to Deluxe Entertainment Services Group Inc. for $31 million.
The deal, which involves Rainmaker operations in Vancouver and in London, England, will give Hollywood-based Deluxe a foothold in the Vancouver market and expand its operations in London.
Rainmaker said the sale was part of the company's plans to streamline its operations and focus on computer animated films and accelerate development of its own film properties. It said developing computer generated films was an area with strong growth potential for the company given the limited number of CG animation studios worldwide.
The purchase price includes $14 million in cash upon closing, $2.5 million as a promissory note payable a year after closing, $6 million in earn-out cash based on revenue targets, $3.5 million assumption of capital leases and $5 million in Deluxe service credits.
The deal, which is subject to customary closing conditions and regulatory approval, is expected to close December 31.
Rainmaker's share price range during the past week: between $2.65 and $2.70; 52-week high: $3.64; 52-week low: $2.35.