Making DVDs

Cinram International is to acquire AOL Time Warner’s DVD and CD manufacturing and distribution businesses in the US and Europe for $1.05 billion in cash.

The acquisition, which is subject to appropriate regulatory approvals and other customary closing conditions, is expected to close in the autumn.

As part of the transaction, Cinram will enter into exclusive long term agreements with Warner Home Video, Warner Music Group and New Line Cinema to manufacture, print, package and physically distribute their DVDs and CDs in North America and Europe.

Assets being acquired include manufacturing facilities in Olyphant, PA, Commerce, CA and Alsdorf, Germany as well as related US and European distribution facilities. The acquired businesses also include Ivy Hill, a provider of packaging and printing services for DVDs and CDs of AOL-affiliated companies and third parties and Giant Merchandising, a company engaged in entertainment merchandising, retail licenses and private label marketing and distribution.

On a stand-alone basis, the acquired businesses are expected to generate approximately $1.1 billion of revenues and $230 million of EBITDA for the fiscal year ended November 30, 2003.