Atlantic Entertainment Group, the largest private independent film and television company in the United States, said Friday that it agreed to merge with Prism Entertainment Corp., a publicly owned video distributor.
The merger will create a full-service entertainment company with $70 million in annual revenue.
Spokesmen for the companies at their Los Angeles headquarters would not give details of the deal. However, Atlantic said in a statement here that investment firms have been retained to arrange about $60 million of new financing for the merged company.
Prism stock closed at $3.375 a share, down 25 cents, on the American Stock Exchange. In addition to distributing videocassettes, Prism is a worldwide television syndicator through its Fox-Lorber subsidiary.
Tom Coleman, president of Atlantic, said in Cannes that his company decided to merge with Prism because the group wanted to control its own video distribution, which previously had been licensed through Paramount Pictures.
"Video is the tail wagging the dog" in the entertainment industry, Coleman said. "It's the largest market, and there's more consumer feedback."
Joining with Prism also allowed Atlantic to enter the stock exchanges, thus expanding financial market opportunities at a time when the market is "downbeat."