As expected, AMC Entertainment Holdings Inc. clinched a definitiveagreement to acquire London-based Odeon & UCI Cinemas Group from investmentfirm Terra Firma Capital Partners Ltd. for about £921 million.
The deal's price is composed of £500 million of equity, 75%of which will be in cash and 25% in shares; £407 million of net debt as ofMarch 31, which will be refinanced at the deal's closing; and £14 million of employeeincentive costs.
AMC's board and Odeon & UCI shareholders have bothapproved the transaction, according to a July 12 news release.
Upon deal completion, Odeon & UCI, Europe's largesttheater operator, will become a unit of AMC. Odeon & UCI will keep itsLondon headquarters and brand names, while CEO Paul Donovan and his managementteam will continue to lead the company.After the deal closes, the combined company will operate 627 theaters and morethan 7,600 screens in eight countries.
The transaction is expected to be completed in the fourthquarter, subject to approval from the European Commission as well as toconsultation with the European Works Council.
Citi serves as AMC's financial adviser to the deal, withPinsent Masons LLP, Husch Blackwell LLP and Weil Gotshal & Manges LLP aslead legal advisers. On Terra Firma and Odeon & UCI's side, Goldman SachsInternational is serving as financial adviser, while Gibson Dunn & CrutcherLLP is providing legal advice.
In a separate news release that same day, AMC said that thedeal with Odeon & UCI will not impact its ability to complete theacquisition ofCarmike Cinemas Inc.However, AMC President and CEO Adam Aron said the latter deal "continuesto be at considerable risk," given Carmike shareholders' "unrealisticview" regarding the Carmike's value to AMC.
AMC Entertainment is a unit of