Lionsgate kupio Summit za $412.5 milijuna

[HorrorHR]

Summit Entertainment and Lionsgate have agreed to walk down the aisle, combining the town's leading minimajors in a cash and stock deal worth $412.5 million.
The deal, which has been expected to close for the past week, was announced at the close of the market Friday.

"This transaction continues Lionsgate's long-term growth strategy of building a diversified worldwide media company through a combination of disciplined, accretive strategic acquisitions and organic growth while maintaining a solid balance sheet," said Lionsgate Co-Chairman and CEO Jon Feltheimer and Vice Chairman Michael Burns. "We are uniting two powerful entertainment brands, bringing together two world-class feature film franchises to establish a commanding position in the young adult market, strengthening our global distribution infrastructure and creating a scalable platform that will result in significant and accretive financial benefits to Lionsgate shareholders."

The initial announcement did not directly address the status of Summit co-chairs Rob Friedman and Patrick Wachsberger following the acquisition.

Lionsgate said transaction is expected to be "significantly accretive" in Lionsgate's 2013 fiscal year beginning April 1

The mini-majors have been negotiating exclusively with each other in recent weeks as execs sorted through the complexity of the transaction. Miramax owner Colony Capital made an offer and had been in negotiations during November and December before dropping out.

A large chunk of Summit's debt -- about $200 million -- will remain with Summit as non-recourse.

The announcement didn't address the issue of whether there will be layoffs. Observors expect that some cuts are inevitable since there are duplicative operations.

Though Lionsgate is headquartered in Vancouver, most of its operations are in Santa Monica, a few blocks from the Summit offices. Summit has about 150 employees, Lionsgate about 500.

The merged entity would have more firepower in a market where the majors have scaled back on mid-budget films in favor of tentpoles and franchises -- creating an opportunity for sizable indies to fill that gap.

The union brings the "Twilight" franchise under the same roof as "The Hunger Games," which Lionsgate is banking on to revitalize its film slate. The last of the "Twilight" pics, "The Twilight Saga: Breaking Dawn -- Part 2," due to open Nov. 16, is likely to take in as much as $1 billion at the worldwide box office.

The first installment of what Lionsgate hopes will be a franchise based on the popular book series, "Hunger Games" opens March 23. The trailer for the pic got a boost with its target aud in running with Summit's "Twilight Saga: Breaking Dawn -- Part 1," which did boffo business following its Nov. 20 domestic bow.

It's understood that a key component for Summit execs in choosing Lionsgate over Colony was that an acquisition by a public company could be attractive to investors because their shares are more liquid than a private company, provided the merger includes stock.

Since 2007, Summit co-chairs Friedman and Wachsberger have transformed Summit from a foreign sales company into a full-service production and distribution studio on the back of its successful gamble on film adaptations of Stephenie Meyer's bestselling series of vampire-werewolf novels.

In April 2007, Summit arranged a $1 billion financing deal -- a transaction that would not have been possible a few months later as the financial markets began melting down.

Last March, Summit closed a $750 million financing deal -- a $550 million term loan and a $200 million revolving line of credit -- that allowed the company to unshackle itself from some of its debt, increase feature production and fund day-to-day operations. It also paid a cash distribution to its largest investors, including Friedman, Wachsberger, Participant Media, Nala Films and private equity fund Rizvi Traverse Management.

Lionsgate and Summit have had discussions about a union going back as far as fall 2008, just before the bow of the first "Twilight" pic. Those discussions resumed last fall in the wake of Lionsgate's settlement with longtime adversary Carl Icahn under which the billionaire agreed to sell off this stake end his three-year quest

Lionsgate shares appreciated by 28% in 2011 and have gained another 3% this year.

Summit execs have said recently that they expect Summit's foreign sales division to remain in operation at the upcoming Berlin and Cannes film markets.

Summit's strategy has been to release and distribute 10-12 films per year, with a focus on the midrange films that the majors are less likely to greenlight. Aside from "Twilight," Summit's bread and butter has continues to be broad-based fare at moderate prices with recognizable stars such as "Red," "Source Code" and a pair of thrillers now in post-production: "Man on a Ledge" with Sam Worthington and "Cold Light of Day" with Henry Cavill, Sigourney Weaver and Bruce Willis. Upcoming pics include dance pic "Step Up 4" and vampire romancer "Warm Bodies."

Besides the fourth "Twilight," "Source Code" and 'The Beaver," Summit's 2011 release slate included "The Darkest Hour", "50/50" and Chris Weitz' drama about Mexican immigrants in Los Angeles, "A Better Life."

A "Red" sequel has been dated for next year but Summit hasn't locked down a director. Summit's also been attempting to launch a "Highlander" reboot. ."

Summit also scored a bit of a stunner two years ago with Oscar-winner "The Hurt Locker" -- the lowest grosser of any Oscar Best Picture winner.

Unlike Summit, Lionsgate also has a sizable TV production-distribution operation that is home to series including AMC's "Mad Men," Showtime's "Weeds" and "Nurse Jackie," "Boss" on Starz and the upcoming Charlie Sheen sitcom "Anger Management" on FX. Its Debmar-Mercury syndication operation includes "Tyler Perry's House of Payne" and "The Wendy Williams Show."

Lionsgate has grown through acquisitions during the past dozen years under Feltheimer and Burns. The duo have orchestrated the acquisitions of film and video libraries including Trimark in 2000, Artisan in 2003, Redbus in 2005, Debmar-Mercury in 2006, Mandate in 2007 and TV Guide Network in 2009, as well as a stake in distrib Roadside Attractions in 2007.

Despite the battle with Icahn, Lionsgate remained an active bidder for MGM in 2009 and 2010 before the Lion went through its pre-packaged bankruptcy in late 2010 in a deal that left Spyglass toppers Roger Birnbaum and Gary Barber in charge.

Lionsgate is nearly $600 million in debt and has about 13,000 titles in its film and TV library.

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