Roadshow Films has confirmed it's buying a one-third stake in US-based producer/international sales agent FilmNation Entertainment for $US18 million.

The alliance will enable FilmNation to significantly grow its development and production slate with the capital going to content creation and/or acquisitions. Existing FilmNation partners will retain ownership positions in the company.

Village Roadshow told the ASX it is funding the purchase from cash reserves. It said the deal, effective January 1, initially will produce small equity-accounted profits before the expected lift in FilmNation's earnings after 2016.

FilmNation handled international sales on David Michod’s The Rover and See-Saw Films' upcoming Life from director Anton Corbijn, the saga of a freelance photographer's unlikely friendship with actor James Dean, starring Robert Pattinson and Dane DeHaan.

This year Kristina Ceyton, who produced The Babadook with Kristian Moliere, had a six-month attachement with its Los Angeles-based production department, funded by Screen Australia.  

The first two features due to begin production in 2015 under the new structure are The Founder, to be directed by John Lee Hancock, which tells the true story of how Ray Kroc created McDonald’s into a billion dollar empire, and The Good House, which will star Meryl Streep and Robert De Niro, based on the New York Times bestseller by Ann Leary.

FilmNation will start shooting Story Of Your Life, starring Amy Adams and directed by Denis Villeneuve (Prisoners), in May.

"Partnering with such a successful and well respected company as Roadshow Films is a significant next step for us," said FilmNation CEO Glen Basner and COO Milan Popelka. “Roadshow’s proven track record speaks for itself and we are proud to have such an experienced company invest with us.

"Together as partners alongside our original co-founding partners Steven B. Samuels, Anthoni Visconsi II, and Dominic Visconsi Jr. who continue to demonstrate their confidence in the company, we’re certain FilmNation can achieve our goals of successfully expanding our investments in feature film content creation while continuing to grow our worldwide platform."

The deal also enables Roadshow Films to expand production outside Australia.  Roadshow Films' Joel Pearlman and Chris Chard said, “Our investment in FilmNation is a significant development in the continuing evolution of Roadshow Films that provides us with new growth opportunities outside our core Australian market.

"We have greatly enjoyed and benefited from the long-term relationship Roadshow has with Glen and the entire FilmNation team and are excited to invest in the future of FilmNation as they embark upon an expanded production slate of strong, quality independent films that will prove popular with audiences around the world."

Pearlman will have a seat on the board and thus take part in deciding which projects to greenlight.

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