Deal adds 43 theaters to Regal's existing 540 locations
Exhibition giant Regal Entertainment Group has joined the recent wave of theater buyouts, entering an agreement to acquire the nation’s eighth-largest cinema chain, Hollywood Theaters.
The deal, which marks only Regal’s second acquisition in several years, totals $191 million in cash along with approximately $47 million of lease obligations and working capital. Buyout includes 43 theaters with 513 screens and is still subject to procedural closing conditions.
News of the acquisition spurred the company’s stock price to increase 3.3% Tuesday to $15.84 per share.
Already the largest theater chain in the U.S. with 540 locations (totaling 6,880 screens), Regal furthers its lead over No. 2 exhib AMC, which has more than 300 Stateside locations. AMC was bought by Chinese conglom Dalian Wanda Group last September, the biggest exhibition shake-up in recent memory.
Regal CEO Amy Miles said in a statement that the acquisition of Hollywood Theaters will add to cash flows and earnings.
“Accretive acquisitions are a key component of our overall business strategy and we look forward to a successful closing and integration of the Hollywood Theater assets during the second quarter,” Miles said.
Regal reported a windfall period last quarter, with profits surging almost ninefold to $37 million from $4 million.
The Knoxville, Tenn.-based circuit has stayed relatively quiet on the acquisitions front; it last bought Great Escape Theaters for $91 million in November, as well as nine locations from AMC Entertainment in May 2010. Since then, however, Cinemark and Carmike carved up the majority of Rave theaters late last year.
Hollywood Theaters, based in Portland, Ore., will use the cash payment to repay approximately $157 million of debt.