Cineworld acquires Picturehouse for £47.3m
UPDATED: Cinema chain says it will not cut staff or change programming; “A lot of new jobs” in the next few years, Picturehouse MD tells Screen.
Cineworld Group has acquired UK cinema chain Picturehouse Cinemas from Arts Alliance for $76m (£47.3m) in cash.
The acquisition includes a total of 21 Picturehouse sites, comprising 60 screens, as well as its distribution arm - Picturehouse Entertainment. It adds to Cineworld’s 80 sites around the UK.
Lyn Goleby, managing director of Picturehouse, said it would be ‘business as usual’ at the chain, with no job losses or programming changes expected. She added that the company would continue to operate as a separate business entity.
Goleby told Screen: “The spirit of the programming and the core offer is absolutely the same going forward. This is a fantastic investment and it’s great to be part of a public company. There should be a lot of new jobs at Picturehouse in the next few years.”
Vice president of business affairs at Cineworld Cinemas Crispin Lilly told Screen that the move would free up cash for Picturehouse expansion: “This move made sense because of the exciting growth opportunities on both sides. Picturehouse has a brand and a proposition in a market that Cineworld couldn’t hope to exploit. There are massive growth opportunities for us in that area. For Lyn and the team it frees up cash for new sites and there won’t be any disrupting what Lyn and Clare have built here.”
The acquisition is expected to help Picturehouse unlock more than 10 new locations already in the pipeline, and strengthens its chances of owning a prized West End venue. Goleby said that the West End was a priority alongside the company’s core operations in the “villages and neighbourhoods”.
Screen asked Goleby whether there were other acquisition suitors: “We were not for sale,” she said. “But Cineworld talked to us and we talked to Cineworld because we are very compatible”.
Director of programming and acquisitions at Picturehouse Entertainment Clare Binns said she expected to be able to acquire more films for Picturehouse’s distirbution arm.
Consideration for the acquisition is in cash, which is being funded from existing undrawn bank debt facilities, assumed debt and the cash proceeds from a proposed issue of up to 6.85 million new ordinary shares, representing approximately 4.8% of Cineworld’s current issued ordinary share capital.
For the year ended 31 December 2011, Picturehouse reported audited sales of £30.3 million, profit before tax of £2.5 million and gross assets of £35.0 million.
Arts Alliance had been the majority shareholder in Picturehouse since 2002.