Acquisition of Complementary Theatre Circuit Expands Platform for
AMC’s Guest Experience Strategic Growth Initiatives
AMC Theatres (NYSE: AMC) (“AMC”) and privately held Starplex Cinemas
(“Starplex”) announced today they have entered into a definitive
purchase agreement for AMC to acquire Starplex for approximately $172
million in cash, subject to working capital and other adjustments. When
completed, AMC will operate approximately 380 theatres with 5,300
screens.
By broadening its footprint for delivering groundbreaking guest
experience innovations -- such as plush power-recliners, enhanced food
and beverage, premium sight and sound, greater guest engagement and
targeted programming – the acquisition will expand AMC’s proven ability
to deliver an exceptional movie experience to more movie-goers.
“This acquisition is expected to create immediate and long-term
substantial value for guests and shareholders,” said AMC CEO Gerry
Lopez. “We will add 90 recliner re-seated screens to our portfolio and
plan to add recliners to an additional 80 screens over the next five
years, further transforming the movie-going experience for millions of
guests. Our large market theatre portfolio will be complemented by new
small and mid-size market theatres, which gives AMC broader movie genre
appeal across a wider spectrum of guests.”
“Starplex and AMC have a shared vision to provide a quality guest
experience, and even more of our guests will now benefit from recliner
re-seats and other great amenities,” said Starplex CEO Steve Holmes.
“Today’s transaction provides Starplex shareholders with meaningful and
immediate value.”
Key Benefits of the Transaction
-
The transaction is expected to result in earnings-per-share, EBITDA
and cash flow accretion, exclusive of one-time transaction-related
charges, in 2016 and beyond.
-
A cash-only transaction, resulting in no dilution of AMC stock.
-
Expansion of AMC’s proven and successful guest experience strategies
into additional Starplex markets.
-
Complementary theatre locations with limited geographic overlap.
-
Complementary guest demographics enhance AMC’s box office profile,
improving AMC’s balance between its large market theatre portfolio and
small- to mid-size market theatres.
-
Attractive synergies available by combining back-of-the-house
functions such as human resources, accounting, finance and technology.
-
AMC’s quarterly dividend will be maintained.
Additional Information
AMC will acquire Starplex on a cash-free, debt-free basis. AMC plans to
fund the acquisition using cash on its balance sheet and availability
under its existing revolving credit facility, if necessary.
Husch Blackwell LLP is serving as AMC’s lead legal advisor. Peter J.
Solomon Company is serving as exclusive financial advisor to Starplex
and Andrews Kurth LLP is serving as Starplex’s legal advisor.
Approvals and Timing
The transaction is subject to customary closing conditions including
receipt of anti-trust approval. The companies anticipate closing this
transaction by the end of 2015.
About AMC Theatres
AMC (NYSE:AMC) is the guest experience leader with 347 locations and
4,972 screens located primarily in the United States. AMC has propelled
innovation in the theatrical exhibition industry and continues today by
delivering more comfort and convenience, enhanced food & beverage,
greater engagement and loyalty, premium sight & sound, and targeted
programming. AMC operates the most productive theatres in the country’s
top markets, including No. 1 market share in the top three markets (NY,
LA, Chicago) http://www.amctheatres.com.
About Starplex Cinemas
Starplex is an independent, privately-held theatrical exhibition company
operating 33 theatres with 346 screens in 12 states: California,
Connecticut, Illinois, Kansas, Missouri, Nebraska, New Jersey, Ohio,
Oklahoma, Texas, Virginia and Washington. http://www.starplexcinemas.com
Forward-Looking Statements
This press release includes “forward-looking statements” within the
meaning of the “safe harbor” provisions of the United States Private
Securities Litigation Reform Act of 1995. Forward-looking statements may
be identified by the use of words such as “forecast,” “estimate,”
“will,” “project,” “intend,” “expect,” “should,” “believe,” “continue,”
and other similar expressions that predict or indicate future events or
trends or that are not statements of historical matters. Similarly,
statements made herein and elsewhere regarding pending acquisitions are
also forward-looking statements, including statements regarding the
anticipated closing date of the acquisition, the ability to obtain
required regulatory approvals or to satisfy closing conditions, the
costs of the acquisition and the source of financing, the expected
benefits of the acquisition on our future business, operations and
financial performance and our ability to successfully integrate the
recently acquired business. These forward-looking statements are based
on information available at the time those statements are made and/or
management’s good faith belief as of that time with respect to future
events, and are subject to risks and uncertainties that could cause
actual performance or results to differ materially from those expressed
in or suggested by the forward-looking statements. These risks and
uncertainties include, but are not limited to, execution risks related
to the transaction, including obtaining regulatory approvals and
satisfying closing conditions; our ability to achieve expected synergies
from the acquisition; our ability to realize expected benefits from the
acquisition; decreased supply, quality and performance of, and delays in
our access to, motion pictures; risks relating to our significant
indebtedness; our ability to utilize net operating loss carry forwards
to reduce future tax liability; increased competition in the geographic
areas in which we operate and from alternative film delivery methods and
other forms of entertainment; continued effectiveness of our strategic
initiatives; the impact of shorter theatrical exclusive release windows;
the impact of governmental regulation, including anti-trust review of
our acquisition opportunities and investigations concerning potentially
anticompetitive conduct, including film clearances and participation in
certain joint ventures; unexpected delays and costs related to our
optimization of our theatre circuit; and failures, unavailability or
security breaches of our information systems.
Forward-looking statements should not be read as a guarantee of future
performance or results, and will not necessarily be accurate indications
of the times at, or by, which such performance or results will be
achieved. For a detailed discussion of these risks and uncertainties,
see the section entitled “Risk Factors” in our Annual Report on Form
10-K, filed with the Securities and Exchange Commission on March 10,
2015, and our other public filings. The Company does not intend, and
undertakes no duty, to update this information to reflect future events
or circumstances, except as required by applicable law.
View source version on businesswire.com: http://www.businesswire.com/news/home/20150714005402/en/
Copyright Business Wire 2015