Cinram Acquires Time Warner Businesses

On October 24, 2003, Toronto-based Cinram International Inc. acquired Time Warner Inc.’s DVD and CD manufacturing and physical distribution businesses, together with certain related businesses in the U.S. and in Europe, for approximately US$1.05 billion in cash. Initially announced on July 18, the transaction also included exclusive long-term agreements to manufacture, print, package and physically distribute DVDs and CDs for Warner Home Video and Warner Music Group in North America and Europe, and for New Line Home Entertainment, Inc. in North America.

Assets acquired by Cinram include manufacturing facilities in Olyphant, Pennsylvania and Commerce, California, manufacturing and printing operations in Alsdorf, Germany, as well as related U.S. and European distribution facilities. The acquired businesses also include U.S.-based Ivy Hill Corp. and Giant Merchandising.

The purchase price was funded from banking facilities in the amount of US$1.175 billion, provided by a syndicate led by Citigroup Global Markets Inc. and Merrill Lynch Pierce Fenner and Smith Incorporated.

Cinram was represented in Canada by Fogler, Rubinoff LLP, with a team led by Norman May, Q.C., and including Monique Rabideau and Elliott Vardin (corporate), David Oliver and Barry Fillimore (banking and financial services) and Peter Guselle, Ian MacInnis and Craig Shaw (tax); and in the U.S. by Shearman & Sterling LLP in New York, with a team led by John Madden and including Christa D’Alimonte, Suzin Kim, Dan Litowitz, Matthew Hyotte and Heiko Schiwek (M&A), William Wiegmann, Michael Baker and Asher Richelli (bank finance), Don Lonczak (tax) and Steve Sunshine (antitrust), and by Howard Berman (corporate) of Ervin, Cohen & Jessup LLP in Beverly Hills who represented Cinram in negotiating the various long-term agreements.

Time Warner was represented in-house by Spencer Hays, senior vice-president and deputy general counsel; Doug Phillips, vice-president and associate general counsel; Paul Robinson, senior vice-president and deputy general counsel, Warner Music Group; Mark Ansorge, vice-president and associate counsel, Warner Music Group; Roger Gold, vice-president and associate counsel, Warner Music Group; and Jay Kinn, vice-president, business and legal, Warner Home Video; and by Cravath, Swaine & Moore LLP in New York, with a team that included Richard Hall, David Teh, Melissa Dawson, Christopher Snyder and Glenn Greilsamer (corporate), Lewis Steinberg and Alyssa Wolpin (tax) and Katherine Forrest (antitrust).

The lenders were represented in Canada by Lang Michener LLP, with a team that included Patrick Phelan (securities), David Thring and Chris Partridge (banking), Dale Schlosser (intellectual property), Kalle Soomer, Q.C. (tax), William Rowlands and Paul De Francesca (real estate); and in the U.S. by Milbank, Tweed, Hadley & McCloy LLP in New York, with a team that included Richard Wight, Drew Fine, Tammara Giardino and Richard Capogrosso.