Imax Corp. shares gained momentum on Friday following AMC Entertainment Inc.'s announcement to install 100 digital projection screens over the next three years.
Imax, based in Mississauga, Ontario, climbed $2.68, or 58 percent, to $7.32 at 4 p.m. in New York time on the Nasdaq Stock market. That pushed the company's gain this year to 95 percent, its highest price this year.
The deal will double the number of Imax screens in North America, adding momentum to the company's effort to introduce digital projection systems, which it plans to release in mid-2008.
Eric Wold, analyst at Merriman Curhan Ford, said in a note to clients that the deal with AMC represents the the most important endorsement of the Imax technology and potential since the firm's founding 40 years ago.
As part of the agreement, AMC will contribute around $150,000 and $175,000 per theater, while Imax will spend about $500,000 to install each venue with its digital-projection technology. The deal comes with a seven year term but can be extended three years if AMC chooses to do so.
Imax made an agreement with DreamWorks Animation SKG Inc. in November to show the studio's first 3-D films, starting in 2009. The agreement ensures a steady flow of 3-D films through 2010, including the fourth installment of the ``Shrek'' series.