April 21, 2009 (FinancialWire) — Peace Arch Entertainment Group Inc. (AMEX: PAE) (TSX: PAE) (Current Market Cap: US$3.44 Mil.) has agreed to sell all of the shares of its North American home entertainment operations to Phase 4 Films Inc., a new entity to be led by current Peace Arch Home Entertainment president, Berry Meyerowitz.

The transaction includes the sale of all of Peace Arch’s home entertainment operations in the United States and Canada, including Peace Arch’s 50% interest in Peace Arch Home Entertainment, LLC, a 50/50 joint venture between Peace Arch and Contentfilm Plc.

Under the terms of the deal, Phase 4 assumes around $7.75 million of debt currently owed by Peace Arch and its subsidiaries to various parties and relieves Peace Arch of a loan guaranty of $2.95 million. Peace Arch also becomes an 8.8% shareholder in Phase 4, with whom it has entered into a long-term distribution agreement.

Peace Arch said that the sale allows the company to focus on its core businesses of television production and motion picture licensing while at the same time cutting overhead, reducing outstanding indebtedness and strengthening its balance sheet.

Toronto-based Peace Arch Entertainment produces and acquires feature films, television and home entertainment content for distribution to worldwide markets.

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