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Entertainment One to acquire Canadian distribution company Seville Entertainment

TORONTO (CP) _ Less than a week after Alliance Atlantis was divvied up, two smaller Canadian movie distributors are coming together in a deal that forms an ambitious new competitor.

Toronto-based film distributor Entertainment One Ltd. (LSE:ETO), which trades on the London Stock Exchange, says its Quebec subsidiary Videoglobe 1 Inc. has agreed to buy Seville Entertainment Inc., owner of Seville Pictures Inc., for an undisclosed price.

The acquisition will pull the company into the Entertainment One Filmed Entertainment division, headed by former Alliance Atlantis chief executive officer Patrice Theroux.

Seville’s theatrical division distributes about 30 new films each year within Canada and up to 10 internationally. It owns the rights to the highly anticipated "Shake Hands with the Devil" based on retired general Romeo Dallaire’s book, which screens at the Toronto International Film Festival next month.

"We are coming into the Toronto Film Festival with strong financial backing and an eye to buying films with our U.K., Canadian and U.S. companies," said Theroux in a release.

"There is a tremendous organic growth opportunity now in Canada. We will expand Seville’s operations in Toronto, add a minimum of 24 films to Seville’s release slate, and will seek to acquire other filmed entertainment assets in Canada."

Seville has a back catalogue of over 500 titles including a variety of international films like "Seven Swords," "Run Lola Run," and several films by famed Spanish director Pedro Almodovar.

The company was founded in 1999 and has built itself on the acquisition of domestic distribution rights for smaller budgeted titles, art house and foreign language films.

"Entertainment One’s strategy to build a global distribution business is perfectly in line with our own business plan With the weight of Entertainment One behind us, Seville is positioned to become an increasing presence in Canadian distribution, allowing us to exploit rights across Canada more aggressively," said David Reckziegel, co-president of Seville alongside John Hamilton.

Entertainment One, formerly ROW Entertainment and before that Records on Wheels Ltd., is Canada’s largest distributor of DVDs, CDs and video games to retailers and last year purchased Koch Entertainment, a large U.S. music and video distributor.

Earlier this year it delisted from the Toronto Stock Exchange after shareholders approved a takeover Marwyn Investment Management LLP, valued at $188 million including $68 million in assumed debt.

The London-based private equity firm was once rumoured to be interested in scooping up Alliance Atlantis.