Lionsgate Studios — the TV studio, movement image group and movie and tv libraries — will merge with Screaming Eagle Acquisition Corp., a SPAC, or particular function acquisition firm led by CEO Eli Baker, in a long-anticipated transfer to separate from Starz that’s anticipated to shut this spring.
Lionsgate Studios will then be one of many largest pure-play publicly-traded content material firms, and a beautiful acquisition goal with a portfolio that features franchise properties The Starvation Video games, John Wick, The Twilight Saga and Ghosts, a sturdy movie and tv manufacturing and distribution enterprise, a number one expertise administration and manufacturing firm, and a big movie and tv library that throws off important money.
Lionsgate has deliberate for practically two years to separate the studio and Starz. CEO Jon Feltheimer final mentioned in August the plan was to attend till the corporate closed its acquisition of eOne from Hasbro, which shall be introduced subsequent week.
SPAC’s have come and gone on Wall Road however Screaming Eagle has distinguished pedigree. Its chaired by Harry Sloan, the longtime media exec and present Lionsgate board member who has stood up among the earliest and most profitable SPACs in media and leisure in partnership with Jeff Sagansky and others. Saganksy is a Screaming Eagle director.
Because of the transaction, 87.3% of the overall shares of Lionsgate Studios are anticipated to proceed to be held by Lionsgate, whereas Screaming Eagle public shareholders and founders and customary fairness financing buyers are anticipated to personal an mixture of roughly 12.7% of the mixed firm. The transaction values Lionsgate Studios at an enterprise worth of roughly $4.6 billion. Lionsgate Studios doesn’t embrace the STARZ platform, which can proceed to be wholly owned by Lionsgate.
Along with establishing Lionsgate Studios as a standalone publicly traded entity, the transaction is predicted to ship roughly $350 million of gross proceeds to Lionsgate, together with $175 million in PIPE (personal funding in public fairness) financing already dedicated by main mutual funds and different buyers.
Web proceeds from the transaction are anticipated for use to reinforce Lionsgate’s stability sheet and facilitate strategic initiatives, together with these associated to the eOne enterprise.
Frequent shares of Lionsgate Studios will commerce individually from Lionsgate’s Class A (LGF.A) and Class B (LGF.B) widespread shares as a single class of inventory.
The deal is topic to some closing situations together with regulatory approvals and approval from the shareholders and public warrant holders of Screaming Eagle.
“This transaction creates one of many world’s largest publicly-traded pure play content material platforms with the power to ship important incremental worth to all of our stakeholders,” mentioned mentioned Feltheimer and Lionsgate Vice Chair Michael Burns. “Coupled with the acquisition of the eOne platform scheduled to shut subsequent week, the enlargement of our partnership with 3 Arts and the robust efficiency of our content material slates, we’ve put collectively all the items for a thriving standalone content material firm with a robust monetary progress trajectory.”
“We’re thrilled to be a part of establishing Lionsgate Studios as one of many solely pure play content material firms within the public markets, which is effectively positioned to unlock worth for each current and new shareholders,” mentioned Screaming Eagle CEO Eli Baker. “We imagine this shall be seen as one of the progressive and worth creating transactions the market has seen in a while.”
