Terra Firma to exit Odeon & UCI Cinemas to Wanda's AMC
UK private equity firm Terra Firma will exit Odeon & UCI Cinemas for GBP921 million ($1.2 billion) to AMC Entertainment, a US-listed cinema chain operator owned by Chinese conglomerate Dalian Wanda Group.
The deal is expected to comprise GBP500 million for the equity, with 75% to be paid in cash and 25% in stock consideration, subject to lock-ups and the assumption of GBP407 million of net debt to be refinanced at closing. The transaction has fully committed debt financing in place which is anticipated to include a mix of term loans and bonds, targeting leverage in the near-term of about 4x adjusted EBITDA. Wanda acquired AMC in 2012 from several PE firms for $2.6 billion.
Terra Firma has invested more than GBP600 million in Odeon over 12 years, expanding the company's number of screens from 1,453 in 2004 to 2,236 today. Acquisition of this portfolio will position AMC as the largest theatre exhibition company in the world. AMC stock rose as much as 8.4% following the announcement and was last trading at $29.80.
"By introducing AMC's operational expertise, scale and innovative guest initiatives across Odeon & UCI's prime theatre locations and digital channels, we expect to drive attendance in these international markets and leverage the growing international demand for movie-going," Adam Aron, president and CEO of AMC, said in a statement. "While we acknowledge that there are some uncertainties related to Brexit, we are encouraged that current currency rates are highly favorable to AMC with the pound falling to a three decade low versus the dollar."
Based in London, Odeon claims to sell 90 million tickets annually across eight countries, making it the number-one theatre operator in the UK and Ireland, Italy and Spain as well as the number-two theatre operator in Austria and Portugal. Revenue for the 2016 financial year totaled about $1.1 billion.
Wanda has been active in the cinema sector since its acquisition of AMC, with recent activity including the purchase earlier this year of Hollywood film production studio Legendary Entertainment for $3.5 billion via its PE-backed Wanda Media unit. In May, another of the firm's subsidiaries, Wanda Cinema, filed to acquire Wanda Media for RMB37.2 billion ($5.6 billion).
AMC is also in the process of acquiring NASDAQ-listed theatre exhibitor Carmike Cinemas in a deal valued at about $1.1 billion. Carmike has 276 theatres with 2,954 screens in 41 US states.
Terra Firma specializes in the acquisition of operational real estate and infrastructure assets. Since 1994, the firm has invested more than EUR16 billion ($17.7 billion) of equity.
More on Europe
Latest News
Asian GPs slow implementation of ESG policies - survey
Asia-based private equity firms are assigning more dedicated resources to environment, social, and governance (ESG) programmes, but policy changes have slowed in the past 12 months, in part due to concerns raised internally and by LPs, according to a...
Singapore fintech start-up LXA gets $10m seed round
New Enterprise Associates (NEA) has led a USD 10m seed round for Singapore’s LXA, a financial technology start-up launched by a former Asia senior executive at The Blackstone Group.
India's InCred announces $60m round, claims unicorn status
Indian non-bank lender InCred Financial Services said it has received INR 5bn (USD 60m) at a valuation of at least USD 1bn from unnamed investors including “a global private equity fund.”
Insight leads $50m round for Australia's Roller
Insight Partners has led a USD 50m round for Australia’s Roller, a venue management software provider specializing in family fun parks.