IMAX Corporation (NASDAQ:IMAX; TSX:IMX) today announced that it has signed a memorandum of understanding with Laser Light Engines, a leading developer and manufacturer of ultra-high brightness, laser-driven light sources. Under the terms of the agreement, IMAX plans to make an equity investment in Laser Light Engines, and Laser Light Engines would develop a custom version of its laser light technology for exclusive use in IMAX digital projection systems.
Laser Light Engines would additionally provide outsourced research and development for new features designed to further enhance and distinguish The IMAX Experience® for IMAX® theatre operators, film studios and moviegoers.
As part of the parties' contemplated partnership, Laser Light Engines would offer its technology exclusively to IMAX for a period of two years and would not offer its technology to any other large format theatre systems for a period of three years. The memorandum of understanding signed by IMAX and Laser Light Engines gives the parties an exclusive period of time within which to reach final agreement on these and other terms.
"IMAX has always been at the cutting edge in terms of developing the most advanced theatre projection systems in the world as part of our focus on providing the best movie going experience anywhere," said Richard Gelfond, CEO of IMAX. "Subject to finalizing our diligence, we see Laser Light Engines as an ideal partner for IMAX, with a team of experienced executives and engineers who understand not only how to develop laser technology, but how to apply it and implement it to create a meaningful product and profitable business."
Gelfond continued, "As contemplated, this equity investment provides us with exclusive rights to the products and research and development pipeline in a period of significant growth in our industry, while enabling Laser Light Engines to further develop their technology and attract additional investors. We believe our business model is positioning us to generate significant cash over the next several years, and this strategic investment is an example of how we are looking to put our cash to work to enhance our market leading reputation for quality presentation, further expand our competitive differentiation and capitalize on the growth in our industry."
"We are thrilled to be tapped by IMAX Corporation which is strong validation of Laser Light Engines' technology in the most demanding application of digital cinema and large format film presentations," said Doug Darrow, chief executive officer of Laser Light Engines. "Laser Light Engines looks forward to designing and developing systems and products that will best harness our high brightness, solid-state illumination laser engines including but not limited to d-cinema, large venue and others."