Carmike Cinemas has closed its deal to acquire Digital Cinema Destinations Corp., the two theater chains said Friday after markets closed.
The all-stock sale expands Carmike’s footprint by 280 theaters and 2,936 screens across 41 states. A spokesman for Digiplex said the deal is valued at $68 million, $48 million of which will go to shareholders and the rest of which will be used to pay down debt and outstanding obligations.
The move continues a wave of exhibition consolidation that has seen several smaller theater chains such as Hollywood Theatres, Great Escape Theatres and Rave Cinemas folded up by larger companies such as Regal and Cinemark.
As part of the deal, Carmike will acquire 100 percent of Digiplex’s 7.93 million shares outstanding. Each Digiplex share will be exchanged for 0.1775 shares of Carmike common stock.
Carmike hopes to grow its network, while also tapping into Digiplex’s experience in alternative content. The theater chains recently engaged in a little cross-pollination when Carmike screened “The American Nurse,” a healthcare documentary pitched at medical professionals, in several of its chains earlier this summer.
“It outperformed blockbuster movies on that day of the week,” Carmike’s President and Chief Executive Officer David Passman told Variety.
“This deal enables us to dip our toes in the world of content and distribution,” he added. “There’s little downside and a lot of upside.”
Alternative programming has become increasingly attractive to theater owners because major studios have pruned the number of films they make annually in recent years.