AMC, largest theatre operator in U.S., Europe and globally, operates
1,000 theatres, 11,000 screens
LEAWOOD, Kan. & STOCKHOLM--(BUSINESS WIRE)--
AMC Entertainment Holdings, Inc. (NYSE:AMC) (“AMC”), the world’s largest
movie exhibitor, announced today it has completed its acquisition of
Stockholm-based Nordic Cinema Group Holding AB (“Nordic”), the largest
theatre operator in the Nordic and Baltic countries. AMC completed the
purchase in all-cash transaction of SEK 5,756 million (USD
$651.9 million), which includes payment of interest on the equity value
and repayment of shareholder loans. In addition, AMC repaid indebtedness
of Nordic of approximately SEK 1,274 million (USD $144.3 million) and
indebtedness of approximately EUR €156 million (USD $168.2 million) as
of March 28, 2017. All amounts have been converted into US Dollar
amounts assuming an SEK/USD exchange rate of .11326 and a EUR/USD
exchange rate of 1.0783, which were the exchange rates on March 23, 2017.
With Nordic added to its portfolio of theatre assets in Europe and the
U.S., AMC has hit the never-before-reached movie exhibitor milestones of
1,000 theatres and 11,000 screens across the globe. AMC now operates
theatres in 15 countries, is the market leader in nine of those, and is
the largest operator in each of the U.S., and Europe and worldwide.
Nordic will operate as a subsidiary of London-based Odeon Cinemas Group,
which AMC acquired in November of 2016. Jan Bernhardsson, formerly
President and CEO of Nordic Cinema Group, has been promoted to
become Chief Operating Officer of Odeon Cinemas Group and Executive Vice
President, AMC Europe. Jan will be in charge of all the AMC controlled
theatres across 14 countries in Europe, and will report to Mark Way,
Managing Director of Odeon Cinemas and President, AMC Europe.
Nordic collectively has 68 theatres with 463 screens and approximately
68,000 seats in nearly 50 large and medium-sized cities in the Nordic
and Baltic nations, and a substantial minority investment (approximately
50%) in another 50 associated theatres with 201 screens, to which it
provides a variety of shared services. Nordic theatres are number one in
market share in Sweden, Finland, Estonia, Latvia and Lithuania, and
currently number two in market share in Norway. With a new theatre
scheduled to open next year in Norway, Nordic is expected to increase
market share to number one here as well. Additional associated theatres
also operate in Denmark.
All Nordic activities are conducted locally in seven markets under
several brands, including SF Bio in Sweden, SF Kino in Norway, Finnkino
in Finland, and Forum Cinemas in Estonia, Latvia, and Lithuania. Nordic
had approximately SEK 2,938 million ($349 million USD)1 of
revenue in 2015, including box office revenues of SEK 1,928 million
($229 million USD)1. Total revenues for the 12-month period
ended September 30, 2016, were SEK 3,159 million ($375 million USD)2
and operating margins for that 12-month period exceeded those of AMC.
AMC purchased Nordic from European private equity firm Bridgepoint and
Swedish media group Bonnier Holding. The transaction received antitrust
clearance by the European Commission on March 21, 2017.
The Combined Companies After Transaction Close
With the transaction now complete, Odeon Cinemas Group has 361 theatres
and 2,926 screens in its European portfolio, including theatres it
directly operates and associate theatres. In addition to its Nordic
subsidiaries, Odeon also operates 243 theatres with 2,262 screens in its
four primary markets: Odeon theatres in the U.K./Ireland, UCI theatres
in Italy and Portugal, UCI Kinowelt in Germany/Austria, and Cinesa in
Spain. Odeon Cinemas Group is the largest operator in the U.K./Ireland,
Italy and Spain, the number two market share in Austria and Portugal and
the number four market share in Germany.
Transaction Rationale
- Highly profitable circuit with minimal
deferred capital expenditures:Nordic theatres are
highly profitable, with attractive operating margins and free cash
flow generation. Nordic has a track record of multiple years of
growth. Nordic’s theatres generally are in excellent condition and the
circuit has been updated to like-new condition over the last few
years. Accordingly, capital expenditure needs going forward for the
existing theatres are expected to be modest.
- #1 Market share leadership position:Nordic is the current market share leader in five of the seven
countries in which it operates, including Sweden and Finland, and is
the #2 exhibitor in Norway, which are among the wealthiest countries
in the world. The market share position in Norway is expected to
increase to #1 when a new theatre opens in Oslo in 2018. Average
market share across the circuit now exceeds 50%.
- Strong value proposition from a pipeline of
development theatres: Nordic currently has 10 theatres in
active development or re-development, across six countries, with most
of these expected to open in 2017 and 2018. These new theatres
represent a key valuation component underlying AMC’s acquisition
decision, as AMC believes these theatres will deliver significant
revenue and earnings growth.
- Extremely well run company and able
management team: Senior executives in Nordic's highly
capable and proven management team have two decades of theatre
experience and will join the well-regarded team at Odeon Cinemas Group.
- Solidifies AMC’s #1 position and expands
global platform: The Nordic acquisition enhances AMC’s
position as the #1 movie exhibition company in Europe going forward,
and broadens and diversifies AMC’s European platform. Adding Nordic to
AMC creates an established presence for AMC across 15 countries with
approximately 1,000 theatres and 11,000 screens and positions AMC with
substantial scale, diversification and growth opportunities.
Comments
“This acquisition contributes immediately to AMC’s continuing growth,
furthers our geographic diversification and provides the potential for
significant future growth opportunities in key European markets,” said
AMC CEO and President Adam Aron. “A primary motivation for this
acquisition was the fact that Nordic is an extremely well-run, modern
and fast growing circuit. It is also an important consideration that the
leadership of Odeon will be strengthened as talented leaders from the
Nordic team, especially including President and CEO Jan Bernhardsson,
will assume additional duties for AMC as we continue to build our
industry-leading European movie exhibition business. Clearly, Europe
will be a significant part of the AMC growth story, and AMC looks
forward to bringing to Europe the innovative theatre experiences for
which we are known in the U.S. to delight movie fans across Europe."
Mark Way, Managing Director Odeon Cinemas Group and President, AMC
Europe, remarked, “Uniting the Odeon and Nordic teams brings together
some of the most experienced and respected cinema operators in Europe.
Our businesses are built on very similar values of developing excellent
cinemas, creating amazing experiences for our guests, and offering
fantastic careers for our people. We’ll create a successful integrated
business that delivers further growth through market leading experiences
for our guests”.
Jan Bernhardsson, Chief Operating Officer of Odeon Cinemas and Executive
Vice President, AMC Europe, added, "I am excited to be joining Odeon and
AMC. The market leading positions of Odeon and Nordic are already
impressive, and together we will be even stronger. The prospects ahead
for AMC in Europe are ever so bright."
Additional Details
-
AMC expects to realize approximately $5 million of annual cost
synergies.
-
AMC will continue to be headquartered in Leawood, Kansas. Adam Aron
will continue to serve as Chief Executive Officer and President, and
Craig Ramsey will continue to serve as Executive Vice President and
Chief Financial Officer.
-
AMC expects to maintain its current quarterly dividend.
-
Citi served as exclusive financial advisor to AMC in the transaction.
Pinsent Masons LLP; Husch Blackwell LLP; Weil, Gotshal & Manges LLP
and Lindahl served as AMC’s lead legal advisors.
About AMC
AMC is the largest movie exhibition company in the U.S., in Europe and
throughout the world with approximately 1,000 theatres and 11,000
screens across the globe. AMC has propelled innovation in the exhibition
industry by: deploying more plush power-recliner seats; delivering
enhanced food and beverage choices; generating greater guest engagement
through its loyalty program, web site and smart phone apps; offering
premium large format experiences and playing a wide variety of content
including the latest Hollywood releases and independent programming. AMC
operates among the most productive theatres in the United States’ top
markets, having the #1 or #2 market share positions in 22 of the 25
largest metropolitan areas of the United States, including the top three
markets (NY, LA, Chicago). Through its Odeon subsidiary AMC operates in
14 European countries and is the # 1 theatre chain in Estonia, Finland,
Italy, Latvia, Lithuania, Spain, Sweden and UK & Ireland.
Footnotes
1 SEK amounts have been converted to U.S. dollars at a rate
of SEK 8.430 = U.S.$1.00, which was the average exchange rate for 2015
2 SEK amounts have been converted to U.S. dollars at a rate
of SEK 8.420 = U.S.$1.00, which was the average exchange rate for the
twelve month period ended 9/30/16
Forward-Looking Statements
This press release includes “forward-looking statements” within the
meaning of the “safe harbor” provisions of the United States Private
Securities Litigation Reform Act of 1995. Forward-looking statements may
be identified by the use of words such as “forecast,” “plan,”
“estimate,” “will,” “would,” “project,” “maintain,” “intend,” “expect,”
“anticipate,” “prospect,” “strategy,” “future,” “likely,” “may,”
“should,” “believe,” “continue,” “opportunity,” “potential,” and other
similar expressions that predict or indicate future events or trends or
that are not statements of historical matters. Similarly, statements
made herein and elsewhere regarding the completed acquisitions of Odeon
& UCI Cinemas Holdings, Ltd. (“Odeon”) and Nordic Cinema Group Holding
AB (“Nordic”) (collectively, the “acquisitions”) are also
forward-looking statements, including management’s statements about
effect of the acquisitions on AMC’s future business, operations and
financial performance, and AMC’s ability to successfully integrate the
acquisitions into its operations. These forward-looking statements are
based on information available at the time the statements are made
and/or management’s good faith belief as of that time with respect to
future events, and are subject to risks, trends, uncertainties and other
facts that could cause actual performance or results to differ
materially from those expressed in or suggested by the forward-looking
statements. These risks, trends, uncertainties and facts include, but
are not limited to, risks related to: financing the acquisitions, AMC’s
ability to realize expected benefits and synergies from the
acquisitions; AMC’s effective implementation, and customer acceptance,
of its marketing strategies; disruption from the acquisitions making it
more difficult to maintain relationships with customers, employees or
suppliers; the diversion of management time on transaction-related
issues; the negative effects of this announcement or the consummation of
the acquisitions on the market price of AMC’s common stock; unexpected
costs, charges or expenses relating to the acquisitions; unknown
liabilities; litigation and/or regulatory actions related to the
acquisitions; AMC’s significant indebtedness, including the indebtedness
incurred to acquire Odeon and Nordic and other acquisitions; AMC’s
ability to utilize net operating loss carry-forwards to reduce future
tax liability; continued effectiveness of AMC’s strategic initiatives;
the impact of governmental regulation, including anti-trust
investigations concerning potentially anticompetitive conduct, including
film clearances and participation in certain joint ventures; operating a
business in markets AMC has limited experience with; the United
Kingdom’s exit from the European Union and other business effects,
including the effects of industry, market, economic, political or
regulatory conditions, future exchange or interest rates, changes in tax
laws, regulations, rates and policies; and risks, trends, uncertainties
and other facts discussed in the reports AMC has filed with the SEC.
Should one or more of these risks, trends, uncertainties or facts
materialize, or should underlying assumptions prove incorrect, actual
results may vary materially from those indicated or anticipated by the
forward-looking statements contained herein. Accordingly, you are
cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date they are made.
Forward-looking statements should not be read as a guarantee of future
performance or results, and will not necessarily be accurate indications
of the times at, or by, which such performance or results will be
achieved. For a detailed discussion of risks, trends and uncertainties
facing AMC, see the section entitled “Risk Factors” in AMC’s Annual
Report on Form 10-K, filed with the SEC on March 10, 2017, and the
risks, trends and uncertainties identified in its other public filings.
AMC does not intend, and undertakes no duty, to update any information
contained herein to reflect future events or circumstances, except as
required by applicable law, except as required by applicable law.

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AMC Entertainment Holdings, Inc.
AMC INVESTOR RELATIONS:
John
Merriwether, 866-248-3872
InvestorRelations@amctheatres.com
or
AMC
MEDIA CONTACT:
Ryan Noonan, 913-213-2183
rnoonan@amctheatres.com
or
ODEON
AND NORDIC:
Simon Soffe, +44 207 766 1809
ssoffe@odeonuk.com
Source: AMC Entertainment Holdings, Inc.