Lions Gate Entertainment Corp. bought the independent movie production company Mandate Pictures, maker of "Stranger Than Fiction," for $56.3 million.
Lions Gate, the largest independent U.S. film studio, is paying $44.3 million in cash and $12 million in stock over an 18-month period. The Vancouver, Canada-based company, which is run out of Santa Monica, said Monday that it also would assume $6.6 million of Mandate's debt.
The purchase will expand Lions Gate's film library, adding "The Grudge" and "The Messengers" horror movies. The titles match Lions Gate's strategy of producing low-cost horror films such as the "Saw" and "Hostel" series, said David Miller, an analyst in Los Angeles with SMH Capital.
"They're getting films that integrate well with the library," Miller said. "Film libraries are like real estate. In general, real estate over time goes up in value. Film libraries are the same."
Mandate Chief Executive Joe Drake, who headed Lions Gate's international distribution division six years ago, will return to the company as co-chief operating officer of the motion picture division. The move will help increase overseas sales, Lions Gate said.
Mandate's movies include "Mr. Magorium's Wonder Emporium," scheduled for release in November. It stars Dustin Hoffman and Natalie Portman.