Lions Gate crafts $165 mil Artisan takeover
After a meandering auction that has stretched over six months, Lions Gate is ready to sign a deal for Gotham film company Artisan. The price: $165 million in cash and assumption of more than $50 million in debt.
A preliminary deal is expected to be signed as early as Wednesday, according to people close to the negotiations.
Lions Gate, a film and TV company based in Los Angeles and Vancouver, was considered a long-shot bidder until a few weeks ago in the auction conducted by investment bank Allen & Co.
The final two bidders were Lions Gate and a group led by ex-USA Films topper Scott Greenstein and film producer Stanley Jaffe. Both bidders made all-cash offers, but the Greenstein-Jaffe group, which was backed by the Thomas H. Lee investment firm, withdrew at a certain point, unwilling to match the Lions Gate figure.
Artisan chief exec Amir Malin is not expected to stay on after Lions Gate takes over, but he is understood to have negotiated a considerable severance package as part of the sale. Malin and other Artisan execs comprise one of four blocs of equity holders. The other Artisan owners are Chicago-based investment firm Richland Gordon, Canadian broadcaster CTV and Boston buyout firm Audax.
Current Lions Gate topper Jon Feltheimer will run the combined companies.
The Lions Gate bid is underwritten by JPMorganChase, which had a prior investment banking relationship with Lions Gate, and is also the lead syndicator on Artisan’s $210 million revolving credit facility.
The addition of Artisan, with its 3,000-title library and robust homevideo operation, is expected to significantly shore up Lions Gate’s long-term financial health. There could be some paring down of the companies’ combined workforce, as there will be considerable overlap in their film and TV operations.
Artisan first gained broad industry notice for the breakout success of its landmark low-budgeter “The Blair Witch Project.” Current productions include “Dirty Dancing: Havana Nights,” which unspools Feb. 13. Now in theaters is horror pic “The House of the Dead.”
Lions Gate, known for edgy fare, will release “Shattered Glass” on Oct. 31 and “The Cooler” on Nov. 19. It recently unspooled “Wonderland” in limited release.