Effects studio Digital Domain buying In-Three and moving most of it out of state

Digital Domain Productions Inc., a leading visual effects house partly owned by director Michael Bay, is bulking up — but not in California.

The parent company of the Venice-based studio said Thursday that it was acquiring Westlake Village-based In-Three Inc. and that it planned to move most of the 3-D conversion company’s 70 employees to Florida.

Founded in 1999, In-Three has been a pioneer in the field of converting movies into 3-D, a business that has taken off since the success of James Cameron’s blockbuster “Avatar.” Among other projects, In-Three did 3-D work on Tim Burton’s “Alice in Wonderland.”

Company executives did not disclose the purchase price. They said most of In-Three’s operations would be moved to Port St. Lucie, Fla., where Digital Domain already has a digital production studio.

“This partnership adds large-scale production to In-Three’s world-class technology, while creating new jobs in the state of Florida,” said John Textor, co-chairman of Digital Domain.

Digital Domain has received tens of millions of dollars in state and local funding to operate its studio in Florida, where labor costs are lower than in California. Plans are in the works for a Digital Domain Institute in West Palm Beach, a four-year program in advanced digital media supported by Florida State University.

“I’d rather keep the jobs in California,” but Florida is “more economical than California, I’m sorry to say,” added Cliff Plumer, Digital Domain’s chief executive.

Digital Domain recently completed production on Walt Disney Studios’ “Tron: Legacy.” It employs 500 people at its Venice headquarters.

Like other California visual effects companies, it faces rising competition from companies around the world that often benefit from lower labor costs or government tax credits. To better compete, Digital Domain opened a studio in Vancouver, Canada, earlier this year.

richard.verrier@latimes.com