AMC Entertainment Holdings Inc. agreed to buy Stockholm-based Nordic Cinema Group Holding AB from European private equity company Bridgepoint and Swedish media group Bonnier Holding in an all-cash transaction valued at 8.25 billion Swedish kronor ($929 million).
Nordic Cinema operates 68 theaters, 463 screens and about 68,000 seats in nearly 50 large and medium-sized cities in the Nordic and Baltic nations, and has a substantial minority interest in another 50 associated theaters to which Nordic provides a variety of shared services. The boards of AMC and Nordic's ownership group have approved the deal, which is expected to be completed before June 30, and is conditional upon antitrust clearance by the European Commission, the company said Jan. 23.
Further, the transaction has fully committed debt financing in place arranged by Citigroup Global Markets Inc. Permanent financing plan anticipates a mix of term loans, bonds and AMC primary equity, targeting leverage in the near term of approximately 4.7x adjusted EBITDA.
The company expects that additional deleveraging can be accomplished as it monetizes its considerable ownership position in National CineMedia Inc. as required by the U.S. Department of Justice in its recent approval of the completed Carmike Cinemas Inc. acquisition. AMC believes this funding plan is prudent and balances the interests of both its debt and equity investors while providing the company the flexibility it needs to execute its business plan.
AMC expects to realize about $5 million of annual cost synergies, and expects to maintain its current quarterly dividend. AMC will continue to be headquartered in Leawood, Kan. The company will continue to be led by Adam Aron as CEO and president, and Craig Ramsey will continue to serve as executive vice president and CFO.
Jan Bernhardsson, Nordic Cinema's current leader, and his current management team will continue to lead the company. Some of these executives are expected to assume increased pan-European responsibilities for AMC and Odeon. Nordic will continue to be headquartered in Stockholm and will operate as a subsidiary of AMC's Odeon unit. It will continue to operate under local Nordic and Baltic brand names.
With the acquisition, AMC will have 1,000 theaters and 11,000 screens in 15 countries.
Citi is serving as exclusive financial adviser to AMC in the transaction. Pinsent Masons LLP, Husch Blackwell LLP, Weil Gotshal & Manges LLP and Lindahl are serving as AMC's lead legal advisers. Nomura International Plc is serving as exclusive financial adviser to Nordic, and White & Case LLP and Mannheimer Swartling are serving as lead legal advisers to Nordic.