MONTREAL — Onex Corp. is set to significantly expand its presence in the North American exhibition biz.
Onex prexy-CEO Gerald Schwartz said the company is going to invest hundreds of millions of dollars to acquire theaters from troubled exhibition chains. The Toronto-based company led a group that inked a deal in February to take over Loews Cineplex Entertainment, the second-largest exhib in the U.S., in a deal worth $250 million (Daily Variety, Feb. 15).
The majority of the financing for Onex’s exhibition expansion will come from the sale of Onex’s 47% stake in airline catering business Sky Chefs to LSG Lufthansa Service Holding. Onex will nab about $843 million from the sale of Sky Chefs, giving the company some $1.3 billion in its acquisitions war chest.
At Onex’s annual meeting Thursday in Toronto, Schwartz told shareholders he felt the timing was propitious to buy further into the exhibition sector. “There is such disarray in the industry,” he said, “we think there’s a real consolidation opportunity worldwide in the exhibition business.”
In February, Onex made a deal to take over Loews Cineplex in partnership with Pacific Capital, an investment company run by fiber-optics entrepreneur Gary Winnick and vulture fund Oaktree Capital. Deal involves an equity investment from the group and a restructuring of Loews Cineplex’s debt. The agreement was inked when the exhib filed for bankruptcy reorganization.