IMAGE ACQUIRES HOME VISION CRITERION DISTRIBUTION RIGHTS INCLUDED IN $8 MILLION DEAL.

Byline: Greg Hernandez Staff Writer

CHATSWORTH - DVD distributor Image Entertainment added some luster to its image Tuesday with the announcement that it has acquired Chicago-based Home Vision Entertainment in an $8 million deal.

As part of the acquisition, Image also negotiated exclusive distribution rights for the prestigious Criterion Collection through 2010, which has included such films as ``The Life Aquatic'' and ``Hoop Dreams.''

The acquisition is one of the largest ever for Image, the former laserdisc giant that has steadily grown into a top independent distributor and producer of home entertainment.

``It gives them tremendous credibility,'' said Ralph Tribbey, editor of DVD Release Report, an industry newsletter. ``It's a good deal, and it really creates a great asset for stockholders.''

Privately held Home Vision, which had net revenue of $29 million in 2004 on more than 130 active titles, specializes in independent and foreign films. Its DVD titles include the BBC production of ``The Chronicles of Narnia,'' the animated classic ``Animal Farm,'' and the George C. Scott film ``The Day of the Dolphin.''

Image said it expects to close Home Vision's Chicago headquarters and warehouse facility in order to consolidate with its Chatsworth facilities. This will result in the eventual layoff of about 40 of Home Vision's 45 employees, although President and CEO Adrianne Furniss will remain as a consultant through 2008.

Image already has 2,800 exclusive DVD titles and 175 exclusive compact disc titles. It will continue to release titles from its new acquisition under the Home Vision Entertainment label.

Image Chief Operating Officer David Borshell said the deal is a springboard for additional acquisitions to expand the company's profile in the fine arts and foreign film category.

``We have a physical and personnel infrastructure that we are in a great position to leverage,'' Borshell said.

Image President and Chief Operating Officer Martin Greenwald added in a statement: ``Now that the transaction has been concluded, we plan to intensify efforts to identify and pursue further opportunities.''

For the past eight years, Image had split retail distribution of the Criterion titles with Home Vision, which had a separate 50-50 joint venture with Criterion. Home Vision sold its half back to Criterion leaving Criterion free to sign an exclusive output deal with Image.

``After well over a decade's experience with us and our brand, Image understands what The Criterion Collection means, both to our core customers and to the retailers who help us reach a wider audience,'' Criterion President Peter Becker said.

Criterion, which has 280 active catalog titles and plans to add three to four new releases each month through 2010, is widely credited with creating the standard for DVD bonus features and audio commentaries. The company first pioneered those features for laserdiscs in the '80s.

``Even when the studios do a special edition, they measure it against what Criterion does,'' Tribbey said. ``This is a very, very smart move. The Criterion Collection is probably the premiere product line on DVD that is out there, and Home Vision is another exceptional line of product.''

Shares of Image closed at $3.09 on the NASDAQ exchange Tuesday, down 3 cents a share.

Greg Hernandez, [phone]

greg.hernandez(at)dailynews.com