SOURCE: Peace Arch Entertainment Group Inc.

June 24, 2008 02:00 ET

Peace Arch® Entertainment and ContentFilm Merge Their U.S. Home Entertainment Operations

Peace Arch® Home Entertainment and Allumination Filmworks Ally for U.S. DVD Distribution

TORONTO--(Marketwire - June 24, 2008) - Peace Arch® Entertainment Group Inc. (AMEX: PAE) (TSX: PAE), an integrated global entertainment company, today announced the signing of an agreement with London-based ContentFilm plc (AIM: CFL) that will integrate both companies' U.S. home entertainment businesses, effective July 1, 2008. The new venture will combine Peace Arch® Home Entertainment and ContentFilm's Allumination Filmworks, creating one of the largest independent DVD distributors in the U.S. marketplace.

The business will operate under the Peace Arch Home Entertainment, LLC banner, and will be managed by the current Peace Arch Home Entertainment management team, led by its President, Berry Meyerowitz. The venture will fortify key operational areas through anticipated synergies and efficiencies in sales, marketing, acquisitions, finance and operations. The new entity will be one of only a handful of independent companies with a direct vendor relationship with Wal*Mart Stores Inc. in both the U.S. and Canada.

Jeff Sagansky, Peace Arch Entertainment Group Inc. Chief Executive Officer, said, "This merger will create one of the leading independent home entertainment companies in the U.S. and will add significant scale to Peace Arch's worldwide distribution capabilities."

John Schmidt, ContentFilm plc Chief Executive Officer, said, "We are delighted to be in business with Berry and his well respected colleagues at Peace Arch Home Entertainment. The merger is an extremely positive opportunity for both companies. The growth achieved by Peace Arch over the last few years is a testament to the strength of its home entertainment division and we look forward to combining with Berry and his team to make our jointly owned operation a thriving success."

Berry Meyerowitz, Peace Arch Home Entertainment President, said, "Our Company's recent expansion into the U.S. market has resulted in significant growth in our home entertainment business, and this merger further reinforces our commitment to increasing shareholder value."

The new entity will utilize Allumination's full service distribution center in South Carolina for all of its distribution requirements in the U.S. market. With the increase in product throughput, the joint venture enables the expansion of the facility's operations creating cost efficiencies and economies of scale. The South Carolina distribution center will continue to provide all fulfillment, reverse logistics and vendor managed inventory analysis for the new venture's titles, as well as those from third party suppliers.

Peace Arch anticipates that the joint venture's overhead will be approximately 30% less than the combined companies' overhead prior to the transaction.

The merger is structured so that Peace Arch and ContentFilm will each retain ownership of its existing catalogs, totaling more than 1,000 titles, and that these programs, in addition to all newly acquired titles, will be distributed by the new venture. Peace Arch will also exploit all of the combined entity's rights in the U.S. television and digital market, and all acquired titles with Canadian distribution rights. Peace Arch will also sell motion pictures acquired through the joint venture that are intended for international theatrical release, and ContentFilm will sell any television, direct-to-DVD and library titles acquired by the new venture in the International marketplace.

About Peace Arch Entertainment Group Inc.

Peace Arch Entertainment produces and acquires feature films, television and home entertainment content for distribution to worldwide markets. Peace Arch owns one of the largest libraries of top quality independent feature films in the world, featuring more than 1,000 classic and contemporary titles. For additional information, please visit www.peacearch.com.

About ContentFilm plc

ContentFilm plc (AIM: CFL) is a pre-eminent owner of media rights supported by strong film, TV and digital sales divisions. Further information on the Company and details of the individual titles that make up the Company's available library is at: www.contentfilm.com.

Forward-Looking Statements

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. These risks include, but are not limited to, that the synergies and financial impact of the joint venture may not be realized, the competitive position of the joint venture may not be maintained, Peace Arch may not realize the anticipated benefits of the joint venture and other risks detailed on Peace Arch's periodic report filings with the Securities and Exchange Commission. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. By making these forward-looking statements, Peace Arch undertakes no obligation to update these statements for revisions or changes after the date of this release.

Contact Information

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