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Merger Creates Cinema Advertising Network Spanning 210 DMAs Across All 50 States Reaching 1.1 Billion Movie Goers
CENTENNIAL, CO — National CineMedia has announced that it will acquire Screenvision creating the single largest cinema advertising network in the US. When the merger is completed NCM’s network will cover nearly all 210 DMAs across all 50 states and deliver content to approximately 3,900 theaters with over 34,000 screens, reaching over 1.1 billion theater goers. National CineMedia was the largest in-theatre digital media network across North America, with the merger NCM has consolidated most of the available cinema advertising inventory.
Under the terms of the deal, National CineMedia has agreed to pay $375 million in cash and stock on a debt free, cash free basis for Screenvision. National CineMedia Inc. (NCMI) is the parent company and owns 45.8% of National CineMedia, LLC (NCM LLC). Following the merger, NCM, Inc. will evaluate whether to contribute Screenvision’s assets to NCM LLC. Although it is under no obligation to do so, NCM, Inc. expects that it will contribute the Screenvision assets and debt incurred to finance the acquisition to NCM LLC in exchange for approximately 9.9 million NCM LLC membership units and that the combined operation will result in an estimated $30 million of annual operating cost savings.
The Company will pay Screenvision’s owners a total purchase price of $225 million in cash and $150 million of the company’s common stock (approximately 9.9 million shares, based upon a fixed price of $15.15 per share), subject to a net working capital purchase price adjustment.
“We are very excited about our merger agreement with Screenvision as it will position the combined new company to be much more competitive in the expanding video and overall advertising marketplace, including the new online and mobile advertising platforms,” said National CineMedia’s Chairman and CEO Kurt Hall. “With the investments we will be making to create one more efficient national network, I am confident that we will bring more advertising revenue to our theatre circuit partners and a higher quality pre show to their patrons. As technology continues to empower consumers to watch programming how and when they want and view advertisements if they want, with our broader network reach and improvements we are making to our audience targeting capabilities I am confident that our theatre network will become the one place where brands are comfortable their ads are being seen.”
The acquisition has been unanimously approved by the boards of directors of both the Company and Screenvision, as well as Screenvison’s equity owners, and is expected to close after the receipt of regulatory approvals and the satisfaction of other customary closing conditions.
“I could not be more proud of the Screenvision team’s accomplishments in helping to drive the cinema advertising industry to where it is today. The choices for advertisers continue to grow daily, and I am excited by the possibilities this business combination creates to enable advertisers to use this high-impact medium even more effectively to reach their business goals,” said Travis Reid, CEO, Screenvision.
The Company was advised in this transaction by J.P Morgan as financial advisor and Sherman & Howard LLC and Dechert LLP as legal counsel. Moorgate Partners and GreenbergTraurig, LLP advised the Company’s independent directors. Barclays is acting as exclusive financial advisor to Screenvision and legal counsel to Screenvision is Latham & Watkins LLP.