Imax Corporation has filed a proposal to acquire the outstanding 96.3 million shares in Imax China, a Hong Kong-listed subsidiary established by Imax Corporation to oversee its business in Greater China. The deal is worth roughly $124 million. The offer represents an approximate 49 percent premium to the 30-trading day average closing price. Upon approval of the offer, Imax Corporation will own 100 percent of Imax China.
The company says the proposed acquisition of Imax China will enable greater operational flexibility to pursue new growth opportunities and applications of Imax technology in the Chinese market. The transaction is expected to be accretive to Imax Corporation immediately following completion; for instance, Imax first quarter 2023 Adjusted EBITDA would have been $5 million, or 18 percent, higher including the Imax China minority interest. The transaction could also unlock approximately $2 million of annual public company cost savings as well as potential tax efficiencies. Imax Corporation intends to finance the transaction in full through its internal cash resources and/or external debt financing.
“This deal is a win-win for Imax Corporation and Imax China, as it unlocks significant financial benefits for Imax while offering Imax China investors a meaningful premium to current market prices,” said Rich Gelfond, CEO of Imax Corporation. “The public listing of Imax China raised capital to help fuel a period of tremendous growth for Imax in China, and this transaction has the potential to usher in a new era of expansion for our brand and technology in this thriving market for entertainment.”
Upon completion of the transaction, Daniel Manwaring will continue as Imax China CEO, reporting to Gelfond and overseeing all local business functions, which include distribution, marketing, finance and additional areas focused on the company’s business interests in China. Imax China will remain headquartered in Shanghai with offices in Beijing.
Imax Corporation www.imax.com