China’s Tencent, PCCW invest in PE-backed STX Entertainment

The size of the round was not disclosed but it reportedly values the studio at nearly $1.5 billion. Dominic Ng, CEO of Los Angeles-based East West Bank, also came in as a new investor, while Hony, TPG, and American billionaires William Wrigley, Gigi Pritzker and her husband Michael Pucker all re-upped.

STX was founded in 2014 by Hollywood producer Robert Simonds in conjunction with TPG Growth Managing Partner Bill McGlashan. The studio focuses on mid-budget films, covering the entire movie-making process from production to distribution. It closed its initial financing in March 2014, with participation from Pritzker and Wrigley, as well as TPG and Hony.

In April of last year, Hony introduced STX to Huayi Brothers Media, resulting in a three-year deal that will see Huayi co-fund, co-finance and co-distribute almost all STX's movies through 2017. The studio is expected to release 12-15 movies a year. It has so far released films such as "The Gift" and "The Boy," as well as dramas "Free State of Jones" and "Bad Moms."

The net proceeds from the latest round will be used to accelerate STX's expansion into a fully integrated media company across television, movies, music and other digital categories such as mobile app-based and virtual reality (VR) entertainment.

"We've broken down the traditional silos of the entertainment business," Simonds said in a statement. "Whether it's through television, apps, video games, social media, film or any other medium, we've created the only company with the infrastructure, reach and industry expertise to incubate, generate and distribute content for all platforms, on a global scale."

As part of the deal, PCCW, which runs the largest pay-TV service in Hong Kong and has operations in mainland China and India, and Tencent, owner of popular Chinese instant messaging platforms WeChat and QQ, agreed to distribute content produced by STX.

In June, Tencent joined Sino-US media investment firm Tang Media Partners in the establishment of a TV production joint venture with Hollywood studio IM Global. Days later, it partnered with Hollywood talent management agency WME-IMG, Sequoia Capital China, FountainVest Partners and its portfolio company Focus Media to create a new China joint venture, WME-IMG China.

STX received financial advice on the latest deal from The Raine Group, with Kirkland & Ellis serving as legal counsel.

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• Topics
• Greater China
• Media
• Expansion
• China
• USA
• Hony Capital
• TPG Capital
• Hong Kong (China)
• Tencent
• TMT