Iwerks Entertainment bolsters amusement ride edge by buying Omni for $34 million.

Burbank-based Iwerks Entertainment Inc. announced the signing of a definitive agreement last week to acquire Omni Films International Inc. for $34 million in cash and common stock.

Completion of the deal between the two amusement ride firms is expected by early May.

Iwerks posted a net loss of about $640,000 on 1993 revenues of almost $39.5 million. Omni had a net loss exceeding $876,000 on revenues of about $7.5 million last year, according Omni's assistant controller, Mark Woodruff.

"The acquisition of Omni Films establishes Iwerks' Attractions and Technologies Division as the single dominant company in the high growth, ride simulation industry," stated Stanley B. Kinsey, Iwerks' chairman and chief executive. The acquisition should also, said company officials, allow Iwerks to become even more competitive overseas, since Sarasota, Fla.-based Omni's simulation theaters and extensive film library sell especially well in Asia. It will also, they predict, leverage Iwerks' cost of production.

"I think it's very positive," said Keith Benjamin, analyst with the San Francisco office of Robertson, Stephens & Co., a New York-based investment bank. "They're basically buying out their second largest competitor."

He said the acquisition bumped his earlier estimate of 25 cents a share for Iwerks' fiscal 1995 earnings to 30 cents a share, and he has given the company's stock a "strong buy" rating.

Iwerks' stock, which debuted on the NASDAQ at $18 last October, opened at $24.25 a share on Feb. 23, the day following the Omni acquisition announcement. It topped at $24.25 before closing at $23.50.

"The earnings outlook for Iwerks had been relatively modest for the near term future," said Michael D. Brown, managing director of the West L.A. office of San Francisco-based investment bank Sutro & Co. "Buying Omni gives Iwerks strength in the ride simulation business and, if Omni achieves its earnings projections, it will increase Iwerks' earnings."

On its own, Iwerks has already been aggressively lining up contracts this year for the movie-based specialty theaters and software it designs and installs in theme parks, world's fairs, museums, visitors' centers and other venues.

The firm's roster of products includes motion simulation, giant screen, 360 degree and 3-D theater systems. Among its clients are Walt Disney Co., Universal Studios-Florida, Busch Gardens Williamsburg and the National Aeronautics and Space Administration.

Two weeks ago (Feb. 14), Iwerks announced it had signed an agreement with Blockbuster Entertainment to design, build and install Turbo Four Theaters for a chain of family-oriented entertainment complexes being built by the Fort Lauderdale, Fla.-based entertainment giant.

Two weeks before that, Iwerks got a contract from Time-Warner Entertainment to install a Turbo theater at Six Flags Theme Park in Jackson, N.J.

And on Jan. 19, the company opened the first of its Cinetroplis theatre complexes on Connecticut's Foxwoods Casino/Resort. This particular complex includes Turbo Tour Theaters and a 360-degree disco.

The debut of the complex turned out to be a major media event since the complex is owned and operated by the Mashantucket Pequot Indian Tribe. Reports say the two year old resort attracts more than 25,000 visitors a day.