Carmike Cinemas and Digital Cinema Destinations (Digiplex) have announced that their boards of directors have approved a definitive agreement for Carmike to acquire Digiplex.
The agreement is a stock-for-stock transaction in which Carmike will acquire 100 percent of Digiplex’s 7.93 million shares outstanding. Each Digiplex share will be exchanged for 0.1775 shares (subject to certain potential reductions) of Carmike common stock. Digiplex currently operates in 21 locations with 206 screens, and has agreements to acquire another five theatres with 53 screens.
The transaction is expected to close during the third quarter of 2014 and will increase Carmike’s footprint to 280 theatres and 2,936 screens in 41 states, inclusive of Digiplex’s acquisition pipeline. The acquisition is subject to certain conditions as detailed in the definitive agreement. Bud Mayo, Digiplex’s chairman and CEO, has agreed to vote stock representing 39.5 percent of the Digiplex voting stock in favor of the transaction.
Carmike’s president and chief executive officer David Passman said, “Carmike strives to be an innovator in the exhibition industry, and we believe the addition of the Digiplex circuit will further enhance those efforts. Since its founding less than 4 years ago, Digiplex has been building a circuit of quality theatres based in leading markets. The circuit is a very complementary fit to Carmike and the acquisition enables us to add 4 new states: Arizona, Connecticut, Maryland and New Hampshire, to our expanding geographic footprint.
“Along with its circuit expansion via opportunistic acquisitions, Digiplex has built an industry leading alternative programming business, generating approximately 5% of admissions revenue, a significantly higher percentage than their larger peers. This transaction allows us to combine resources as we grow together, and we could not be more pleased to welcome Digiplex to our expanding theatre network.”
Mayo said, “We view this transaction as a complementary win-win for both organizations. Digiplex holders will benefit by receiving stock in one of the industry-leading exhibitors. David Passman, his fellow senior executives and their customer-centric, theatre-level teams have together orchestrated a fantastic, multi-year turnaround – both operationally and financially.”
All of the acquired theatres in Digiplex’s current circuit feature digital projection systems. Over 35 percent of the screens are 3D-capable and one theatre (Surprise, Arizona) has an Imax auditorium. Several locations include D-Box motion-code action seats and Digiplex’s Solon, Ohio theatre has an auditorium with customized 4D seats.