PEP exits Australian cinema chain Hoyts to Chinese buyer

The sale was confirmed by Hoyts but financial terms were not disclosed. The private equity firm ran a dual-track process targeting a trade sale or an IPO, and it was suggested earlier in the year that a public offering would seek to raise around $900 million ($731 million).

According to AVCJ Research, PEP bought Hoyts for $440 million in 2007 from PBL and West Australian Newspapers. There have been several roll-up acquisitions and Hoyts is now the second-largest cinema operator in Australia, with 450 screens across Australia and New Zealand. Other assets include movie rental business Hoyts Kiosk and Val Morgan, the dominant player in cinema advertising in Australia.

PEP explored an IPO for Hoyts in 2011 before shelving plans due to difficult market conditions. Hoyts' film distribution business was sold to Studiocanal in 2012 and the private equity firm took advantage of strong liquidity in the US to refinance the investment and make dividend payments in 2013.

Dalian Yifang is one of the largest real estate developers in China but much of Sun's wealth is now said to come from his stakes in assets owned by Wanda Group, a conglomerate that also hails from the northeastern Chinese city of Dalian. It is controlled by Jianlin Wang, China's second-richest individual.

Sun has a 6.3% interest in Wanda Commercial Properties, the group's shopping mall development arm, which recently raised $3.6 billion through an IPO in Hong Kong. He also owns 4.2% of Wanda Cinema Line Corporation, China's largest movie theater chain. The company, which accounts for 15% of total box office sales in the country, filed for an A-share listing in October. Other investors include Tsinghua Holding Capital, an investment arm of Tsinghua University, and Sequoia Capital.

In 2012, Wanda Group acquired US-based cinema chain AMC Entertainment from Apollo Global Management, Bain Capital, CCMP Capital Advisors and Spectrum Equity Capital for $2.6 billion. AMC went public in the US last year, raising about $332 million.

PEP has been very active in the exit market over the past 12 months. It has been responsible for two IPOs, Spotless Group and Asaleo Care, worth $1.56 billion, and managed to secure a full exit from the latter. The GP received close to $550 million from the two offerings. There were also trade sales of Peters Ice Cream and Griffin's Foods, plus a block trade of Veda Group stock, which takes realizations for 2014 - before the Hoyts transaction - to more than $2 billion.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• Exits
• Consumer
• Media
• Australasia
• Greater China
• Australia
• Pacific Equity Partners
• Trade sale
• Exit
• Consumer
• Media
• China