Peace Arch Entertainment Group Inc.

Peace Arch Entertainment Group Inc.

August 01, 2005 06:36 ET

Peace Arch Completes US $2 Million Private Placement With Top Entertainment Industry Veterans-Jeff Sagansky, Kerry McCluggage and Drew Craig

TORONTO, ONTARIO--(CCNMatthews - Aug. 1, 2005) -

Craig Named Board Chairman; Sagansky and McCluggage to Sit on 'Greenlight Committee'

Peace Arch Entertainment Group Inc. (TSX:PAE)(AMEX:PAE), a diversified Canadian entertainment company, today announced that it has completed a previously announced arm's length private placement of 4,347,827 Preference Share Units of the Company for US $2,000,000 with a group of private investors including entertainment industry leaders Jeff Sagansky, Kerry McCluggage and Drew Craig.

Jeff Sagansky has served as President of Tri-Star Entertainment where he greenlighted such films as "Look Who's Talking," "Peggy Sue Got Married," "Steel Magnolias," and "Glory." In 1990, he joined CBS as head of programming, where he engineered CBS's ratings rise from third to first place in a mere 18 months. While there, CBS developed such critically acclaimed series as "The Nanny," "Dr. Quinn, Medicine Woman," "Touched By An Angel," "Picket Fences" and the cult favorite "Northern Exposure." In 1996, he joined Sony as co-President of Sony Pictures Entertainment in charge of Worldwide Television and Strategic Planning for the studio. At Sony, he oversaw the purchase of Telemundo and the Loews-Cineplex merger. In 1998, Sagansky became President and CEO of Paxson Communications Corporation, owner of PAX TV. During his four-year tenure at Paxson, PAX's network distribution grew from 60% of U.S. TV households to almost 90%.

Kerry McCluggage began his career in the entertainment industry in 1978 at Universal Television, and in 1980 became the company's youngest vice president at the age of 25. In his 13 years at MCA/Universal, he worked in the theatrical division, served as President of Universal Television, and also produced and developed a ground-breaking television series, "Miami Vice." Other series he developed during his tenure include "Magnum P.I.," "Murder, She Wrote," "The A-Team," "Coach," "Northern Exposure," "The Equalizer" and "Law & Order." In 1991, McCluggage became Chairman of Paramount Television Group, supervising production and worldwide distribution of Paramount's television programming. During his 11 years at Paramount, McCluggage shepherded such series as "Frasier," the highly successful "Star Trek" series, "JAG," and the top-rated magazine series "Entertainment Tonight." He also developed and launched America's fifth broadcast network, UPN, while growing the company's station holdings and overseeing the start of the Sci-Fi Channel domestically and the Paramount Comedy Channels in the U.K. and Spain. He is currently President of Craftsman Films, an independent production company developing motion picture and television product.

Both Sagansky and McCluggage will sit on the company's "Greenlight Committee" and help current management shepherd new projects to fruition.

The Company also announced the appointment of Drew Craig as Chairman of its Board of Directors. Craig was the President and CEO of Craig Media, Canada's largest privately held television broadcaster until its sale to Chum Limited in 2004. Founded in 1948 by John Craig in Brandon, Manitoba, the company began its foray in television broadcasting in 1955 with the launch of CKX-TV. The company was based in Calgary, Alberta. Craig Media was the owner of the A-Channel television stations, CKX, a CBC affiliate, in Brandon, Manitoba; and three digital television specialty channels: MTV Canada, MTV2 and TV Land Canada.

Peace Arch Closes Private Placement, 8/1/05

"We are extremely excited with the wealth of talent, relevant industry experience and successful track records this group of investors brings to Peace Arch. We believe their extensive industry knowledge and relationships will be of significant strategic value to the Company as we continue to grow and execute our business plan going forward," stated Gary Howsam President and CEO of Peace Arch Entertainment.

The placement was completed at a subscription price of US $0.46 per Unit, each Unit consisting of one convertible preference share and one preferred share purchase warrant. The Units separate at Closing. Each preference share carries a 10% cumulative annual dividend and will be convertible at any time into one common share of the Company on a one-for-one basis, subject to customary adjustments, for no additional consideration. Each warrant is exercisable into one preference share of the Company at an exercise price of US$0.50 per share for a period of 48 months from closing, which preference share will carry a 10% cumulative annual dividend and will be convertible at any time into one common share of the Company on a one-for-one basis, subject to customary adjustments, for no additional consideration.

The transaction closed on July 29, 2005, and remains subject to final regulatory approval.

The net proceeds of the Offering will be used by the Company to fund working capital requirements and for general corporate purposes.

Peace Arch Entertainment Group Inc. (, one of Canada's foremost entertainment companies, creates, develops, produces and distributes proprietary feature film and television programming for worldwide markets. Peace Arch Entertainment Group Inc. and its subsidiaries have offices in Toronto, Vancouver, Los Angeles and London, England.

This press release includes statements that may constitute forward-looking statements, usually containing the words "believe", "estimate", "project", "expect", or similar expressions. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Factors that would cause or contribute to such differences include, but are not limited to, continued acceptance of the Company's products and services in the marketplace, competitive factors, dependence upon third-party vendors, availability of capital and other risks detailed in the Company's periodic report filings with the Securities and Exchange Commission. By making these forward-looking statements, the Company undertakes no obligation to update these statements for revisions or changes after the date of the release.

Contact Information

  • Peace Arch Entertainment Group Inc.
    Nicole Spracklin
    (416) 487-0377 (ext. 237)
    Jaffoni & Collins Incorporated
    Robert Rinderman or Karin Oloffson
    (212) 835-8500