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Merger to produce Canuck toon titan

IN a move that could re-pixilate the digital animation landscape in North America, Rainmaker Income Trust plans to purchase Vancouver-based CGI house Mainframe Entertainment for a reported US$13.8 million.
September 1, 2006

IN a move that could re-pixilate the digital animation landscape in North America, Rainmaker Income Trust plans to purchase Vancouver-based CGI house Mainframe Entertainment for a reported US$13.8 million.

Rainmaker, also headquartered in Vancouver, is set to acquire 62% of Mainframe stock from New Jersey based-IDT Entertainment (which, in turn, is in the process of being acquired by Colorado-based Liberty Media) and will obtain the remaining shares from minority stock holders.

Expected to take two months, the transaction will marry Mainframe’s CGI know-how in the TV and direct-to-DVD markets to Rainmaker’s theatrical post-production visual effects experience and high def capabilities, creating what Rainmaker CEO Warren Franklin believes will be a truly global player on the scene.

‘We are not just putting together a financial deal,’ Franklin says, adding both companies have a long history as animation innovators. ‘We are here to create a studio that goes on to become one of the major ones in the world.’

The newly formed company will boast 300 artists and technicians. Two offices located in Vancouver, Canada along with Rainmaker’s London and Mainframe’s L.A. offices will be make up the new operation. Both Franklin and Mainframe CEO Rick Mischel say they do not anticipate the merger will result in lay-offs.

Since Mainframe’s first major television production ReBoot ceased production in 2001, the company has focused on the DTV market with properties such as Arthur and Barbie. In August, the company announced a deal with The Weinstein Company to co-produce The Nutty Professor as an animated DTV feature.

Rainmaker’s post-production digital effects handiwork can be seen in such films as The Da Vinci Code and I, Robot. And the company has an established clientele of Hollywood heavyweights including DreamWorks and Twentieth Century Fox.

Both Franklin and Mischel see the combination of resources as a necessary step in order to tackle a full-length animation features as well as further television series work. ‘Rainmaker already has a theatrical pipeline and a technological infrastructure,’ Mischel says, adding the companies’ goals are complementary.

Another aspect that will no doubt help the new entity is regaining access to tax credits. After two years under U.S. ownership, Mainframe will once again be able to take advantage of a pool of provincial funding from the British Columbia government. A substantial rebate on labor costs, in particular, will help the company maintain competitive service work rates.

‘It enables us to officially pursue the co-production route, which we like to do on the television series side,’ Mischel says. ‘And it enables us to access Canadian talent and Canadian content benefits.’ GR

About The Author
Gary Rusak is a freelance writer based in Toronto. He has covered the kids entertainment industry for the last decade with a special interest in licensing, retail and consumer products. You can reach him at garyrusak@gmail.com

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