Production houses Decode Entertainment of Toronto and The Halifax Film Company have come together under a newly formed umbrella company, DHX Media, which has gone public.

The merger will allow both companies to grow, according to Decode cofounder Steven DeNure.

"We have been looking for some time for opportunities to raise capital," DeNure says. "We got talking to Halifax [Film Company], who had been doing the same thing... By combining efforts, we really get to critical mass, where it's possible to do what we've done. The businesses are very complementary."

HFC cofounder Michael Donovan will be CEO and chairman of the new company, which will be based in Halifax.

"For the past few years it's been very difficult to get financing in Canada for a film company," says Donovan. "The best way to do this is by combining - but retaining our individual creative cultures."

Decode and HFC will keep their names, with no layoffs on either side, according to both DeNure and Donovan.

"One of the things we agreed upon is that DHX would be an umbrella, and that both companies would continue to work autonomously," says DeNure.

Donovan and partner Charles Bishop are former execs with Salter Street Films, the company that produced This Hour Has 22 Minutes, currently in its 13th season, and Bowling for Columbine, the Oscar-winning Michael Moore film. They formed HFC in 2004.

DeNure, Neil Court, John Delmage and Beth Stevenson formed Decode in 1997, specializing in children's programming including Franny's Feet and Naturally, Sadie.

"Decode has a well-established distribution arm," says DeNure. "By combining the companies we have a great base from which to work. Halifax has a great profile on the comedy side. We feel there will be a lot of room to develop new projects."

Decode's founders will share 22.19% of DHX. Donovan and Bishop will share 40.2%. The company is now listed on both the Toronto and London stock exchanges.

"It's basically business as usual, and bigger is better," says Donovan. "We expect that this new structure will allow us access to new streams of capital."

"We think this will be good for the industry overall," says DeNure. "It's been a while since someone did this. There are very few publicly traded companies that are focused primarily on content. As producers and distributors, we think content, ownership and creation are hugely important. The fact that we've been able to do this is an excellent signal to the industry overall."