A Flurry of Deals


Acquisitions and consolidations throughout the world have been making most of the news in the motion picture theatrical industry over the last 12 to 18 months. This comes at a time when the industry was showing a downturn at the box office during the summer season but has now picked up nicely with strong showings by Skyfall, The Twilight Saga, Wreck-It Ralph, Lincoln, Flight, Life of Pi and The Hobbit.

It seems like old times as the major players continue to support their buying habits and we are now witnessing more companies acquiring others to expand their market share.
Is big really good and does domination in certain territories always make for better business? Only time will tell, but the amount of activity worldwide is truly reminiscent of the motion picture industry in the ’90s. Let’s take a look at the global landscape and see if any pattern emerges.

Regal Entertainment Group, the largest theatre circuit in the United States, has completed the acquisition of Great Escape Theatres. The deal totals 25 theatres representing 301 screens at a pre-synergy multiple of approximately 5.5 times cash flow for an aggregate purchase price of $91 million in cash. The acquisition of the Great Escape circuit will enhance Regal’s presence in Georgia, Illinois, Indiana, Kentucky, Missouri, Nebraska, Ohio, Pennsylvania, South Carolina, Tennessee and West Virginia.

Carmike Cinemas completed purchase of 16 entertainment complexes with an aggregate of 251 screens based in seven states and 13 individual markets from Rave Reviews Cinemas. Of the 16 theatres purchased, six are located in Alabama, four in Florida, two in Indiana, and one each in Illinois, Pennsylvania, Tennessee and Texas. All 251 auditoriums are fully digital and include stadium seating. Approximately 40% of the screens are 3D-capable and seven theatres include IMAX screens. All 251 screens are participants in the Screenvision Cinema Network.

Cinemark USA and Rave Cinemas entered into an asset purchase agreement pursuant to which Cinemark will acquire substantially all of the assets of Rave, primarily consisting of 32 theatres located in 12 states, representing 483 screens, for a purchase price of approximately $240 million. All screens to be acquired are fully digital and 37% of the screens are 3D-capable. The assets also include seven IMAX screens and nine premium large-format auditioriums.

AMC Entertainment Inc. and Rave Cinemas entered into a definitive agreement pursuant to which AMC will acquire four theatres owned by Rave. The locations have a total of 61 all-digital screens, 46 percent of which are 3D-capable. The theatres are in three markets new to the AMC portfolio: Montgomery, Ala.; Destin, Fla; and Baton Rouge, La.

Wanda: The owner of China’s largest movie theatre circuit took a big leap forward into the U.S. market, acquiring AMC Entertainment Inc., the nation’s second-largest theatre chain, the latest in a flurry of high-profile deal-making between the countries’ entertainment industries. Wanda acquired AMC’s 5,034 screens in 346 theaters in U.S. and Canada.

Vue: Vue Entertainment, one of the top three cinema chains in the U.K., acquired rival circuit Apollo Cinema in a deal reportedly valued at 20 million euros. The deal provides Vue with a further 14 cinemas and 83 screens to add to its U.K. portfolio for a new total of around 742 screens, which would put it much closer to second-ranked Cineworld with 784 screens. Vue currently has an estimated 68 sites with 659 screens in the U.K. alone. Vue also purchased the 84.6 percent stake in CinemaxX held by Herbert Kloiber’s Tele Munchen Group for 147 million euros ($190 million). CinemaxX operates 31 multiplex cinemas in Germany and three in Denmark with a total of around 75,000 seats.

PVR: PVR Ltd. bought the 69.27 percent promoter stake in competing multiplex operator Cinemax India for 3.95 billion rupees ($745 million). New Delhi-headquartered PVR—which opened India’s first multiplex in 1997 as part of its earlier joint venture with Australia’s Village Roadshow—runs 46 properties with 213 screens and a total seating capacity of 50,655 seats. Mumbai-based Cinemax—which has a stronger presence in western India—runs 39 locations with 138 screens and 33,535 seats.

CJ CGV: South Korea’s CJ-CGV paid $73.6 million to become the largest cinema operator in Vietnam with it 80% ownership of MegaStar. Mega Star, which opened its first cinema in Hanoi in 2006, currently operates seven multiplexes and 54 screens in Hanoi, Ho Chi Minh City, Danang, Hai Phong and Dong Naii, accounting for some 60% of the box office in Vietnam.

Each acquisition or consolidation has certain similarities. All of the theatres have digital projection and 3D and most have stadium seating. In each instance, the new owners are looking to expand their footprint and create market leadership and shareholder value. All believe that the exhibition business benefits from consolidation, as a large scale strengthens competitive advantage as well as significantly enhancing operational efficiencies. What other deals will 2013 bring?

A Death in the Family
We at Film Journal International lost an important member of our family at the beginning of December with the sudden death of longtime Southeast Asia correspondent Scott Rosenberg. For more than two decades, Scott served as our Asia-Pacific bureau chief, based in Bangkok, Thailand. His many connections in the Asian film community, and particularly in Thailand, were a valuable resource for his reporting on that fascinating, dynamic and fast-growing part of the movie world. Scott also served as a consultant to our parent company’s annual Asia-Pacific cinema convention, CineAsia.

A native of Maryland, Scott also had an active film-industry role outside of journalism. From 2007 to 2010, he was director of the Phuket Film Festival in Thailand, which we also founded. He was also a member of the Federation of Indian Chambers of Commerce and Industry International Entertainment Advisory Panel for three years.

In 1997, Scott founded Asian Movie Works (AMW), a public-relations and marketing consultancy whose clients over the years included Filmart, Eastman Kodak, Home Box Office Asia, Technicolor Asia, and most recently the Thailand Film Office. That same year, His Majesty Norodom Sihanouk, King of Cambodia, awarded him the title Commander of the Royal Order of Sahametrei. He was presented the “Friends of Thailand” Award by the Thai government in 2002.

In his spare time, Scott raised rare Thai Ridgeback dogs, and promoted the paintings created by the elephants of northern Thailand—creatures that he adored.

Scott’s body was cremated on Dec. 15 following funeral services at a Bangkok temple. We will miss his big personality and love of life, and send our sympathies to his many friends in his adopted homeland.