Lionsgate said on Friday it will separate its film and TV business and 18,000- strong library to create Lionsgate Studios Corp., a stand-alone publicly traded entity with an enterprise value of $4.6bn.
The studio business will merge with Screaming Eagle Acquisition Corp., a special purpose acquisition rights company created for the transaction. The Starz TV network and streaming platform will remain wholly owned by Lionsgate.
The transaction is expected to close in spring 2024.
Lionsgate said in a press release the deal positions Lionsgate Studios as a “platform-agnostic, pure play content company with a deep portfolio of franchise properties including The Hunger Games, John Wick, The Twilight Saga and Ghosts, a robust film and television production and distribution business, a leading talent management and production company and a world-class film and television library”.
Lionsgate is expected to hold 87.3% of the total shares of Lionsgate Studios, while Screaming Eagle public shareholders and founders and common equity financing investors are expected to own an aggregate of approximately 12.7%.
The deal is expected to deliver approximately $350m of gross proceeds to Lionsgate, including $175m in private investment in public equity financing already committed by leading mutual funds and other investors.
The company said net proceeds from the transaction are expected to be used to enhance Lionsgate’s balance sheet and facilitate strategic initiatives, including those related to the eOne business, the acquisition of which is scheduled to close by the end of this calendar year.
“This transaction creates one of the world’s largest publicly-traded pure play content platforms with the ability to deliver significant incremental value to all of our stakeholders,” said Lionsgate CEO Jon Feltheimer and vice chair Michael Burns. “Coupled with the acquisition of the eOne platform scheduled to close next week, the expansion of our partnership with 3 Arts and the strong performance of our content slates, we’ve put together all of the pieces for a thriving standalone content company with a strong financial growth trajectory.”
“We are thrilled to be part of establishing Lionsgate Studios as one of the only pure play content companies in the public markets, which is well positioned to unlock value for both existing and new shareholders,” said Screaming Eagle CEO Eli Baker. “We believe this will be seen as one of the most innovative and value creating transactions the market has seen in some time.”
Morgan Stanley is acting as financial advisor to Lionsgate and Citigroup as financial advisor to Screaming Eagle.
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