Lionsgate – the film studio behind “The Hunger Games” and “John Wick” and other successful films – announced on Friday that it will merge with a special acquisition company in a long-expected deal that separates it from Starz Television and values the studio at $4.6 billion.
Key Information
Lionsgate announced on Friday that the studio’s business, content library, talent management company, and production company will merge with a special acquisition company called SPAC Screaming Eagle Acquisition Corp. to create Lionsgate Studios, which will not include the Starz platform and will establish Lionsgate Studios as a separate publicly traded entity.
The current Lionsgate company will retain Starz and hold 87.3% of Lionsgate Studios’ shares, while 12.7% will be owned by founders, shareholders, and investors in Screaming Eagle, which is led by former Hollywood CEO Harry Sloan.
The deal is expected to generate around $350 million for Lionsgate, including $175 million in PIPE (private investment in public equity) financing that is already committed.
The deal is still subject to regulatory approval and shareholder consent and is expected to close in Spring 2024.
Main Background
Lionsgate was founded in Canada in 1997 and went public by merging with Beringer Gold Corp, which is listed on the Toronto Stock Exchange. The company entered the entertainment industry by acquiring small production and distribution companies before launching its first films in the Latin market. In 2012, it acquired Summit Entertainment, which produced and distributed the “Twilight” films, and in the same year, the success of “The Twilight Saga: Breaking Dawn – Part 2” and “The Hunger Games” pushed the company past the billion-dollar mark at the North American box office for the first time. Currently, Lionsgate distributes CBS films and owns half of Pilgrim Studios and is expected to close an acquisition deal for eOne from Hasbro – which will give it titles like “The Rookie” and “Naked and Afraid” – next week.
The Big Number
$471 million. That is the amount earned by Lionsgate’s five most successful films – “John Wick: Chapter 4,” “The Hunger Games: The Ballad of Songbirds and Snakes,” “Saw X,” “Jesus Revolution,” and “Plane” – at the box office this year. The studio has also been behind some of the best-reviewed films this year, including “Are You There God? It’s Me, Margaret” and “Joy Ride.”
Note: Lionsgate Studios has been registered as the latest deal facilitated by Harry Sloan and Jeff Sagansky, the CEO of Screaming Eagle. The duo has also completed SPAC deals with the sports betting site DraftKings and launched mobile gaming technology maker Skillz, which allows players to compete in games like Solitaire Cube and Bubble Shooter. Spinning Eagle is the eighth company formed by Sagansky and Sloan.
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