Lionsgate, a well-known entertainment company, recently announced exciting plans to restructure its business. They’re splitting their film and TV production and distribution operations, which includes an impressive library of over 18,000 titles, from their Starz TV network and streaming service.
Here’s the big news: Lionsgate’s studio division is joining forces with Screaming Eagle Acquisition Corp., a company that specializes in such mergers. This significant move is set to be finalized by spring 2024.
The newly formed Lionsgate Studios Corp. will operate independently, allowing investors to focus specifically on the value of its film and TV projects. This strategic separation is expected to generate around $350 million, with half of that amount already secured from top-tier investors.
This deal places the value of Lionsgate Studios at a hefty $4.6 billion. Post-transaction, Lionsgate will still hold a majority (87.3%) stake in the new entity while Screaming Eagle’s founders, their public shareholders, and other investors will collectively own about 12.7%.
Lionsgate’s leadership, including CEO Jon Feltheimer and Vice Chair Michael Burns, are enthusiastic about this development. They believe it will make Lionsgate one of the largest independent content platforms globally. This move, along with other key initiatives like the upcoming acquisition of entertainment company eOne, strengthens Lionsgate’s position in the industry.
Interestingly, Lionsgate Studios’ shares will be traded separately from Lionsgate’s other shares. Notably, this new arrangement doesn’t include Starz, which remains fully under Lionsgate’s control. Remember, Lionsgate had acquired Starz for $4.4 billion back in 2016.
This announcement caps off a successful year for Lionsgate, marked by over $1 billion in global box office revenues from hits like “John Wick: Chapter 4,” the “Hunger Games” prequel, and “Saw X.” Beyond film and TV, Lionsgate Studios also includes a talent management division.
Financially, this move is expected to bring in about $350 million for Lionsgate, with $175 million already pledged through private investments. These funds will support strategic goals, including the acquisition of eOne.
Lionsgate’s decision to merge with Screaming Eagle, a publicly traded company, is a strategic one. It’s a way to raise funds and go public without the lengthy process of a traditional IPO.
Lionsgate Studios Spinoff Plan Set: Deal Values Business at $4.6 Billion and Will Raise $350 Million https://t.co/YDDxYYVnlg
— Variety (@Variety) December 22, 2023
Eli Baker, CEO of Screaming Eagle, expressed his excitement about creating a unique public market presence for Lionsgate Studios. He anticipates this move will be highly beneficial and innovative.
In terms of financial management, Lionsgate plans to maintain its current debt structure. Morgan Stanley and Citigroup Global Markets are playing critical roles as financial advisors and placement agents in this transaction. Source