Cineplex is selling its arcade game business to an international investment company for $155 million in cash. The Toronto-based theatre giant announced Wednesday that OpenGate Capital has bought its Player One Amusement Group business, which sells, distributes, operates and services arcade games and other equipment.
Under the deal, Player One has signed a long-term agreement to continue to supply and service games in Cineplex's theatres and location-based entertainment venues, including its Rec Room and Junxion venues.
Cineplex positioned the deal as a way to unlock "tremendous value" for the company and its stakeholders while also boosting its debt repayments.
"As we continue to focus on our growth plan, the strategy to divest P1AG came at an opportune time to strengthen our balance sheet,” Ellis Jacob, Cineplex's president and chief executive, said in a statement.
In its latest quarterly financial results, Cineplex reported its long-term book value debt totaled $814.8 million as of Sept. 30, including roughly $267 million in convertible debentures.
Debt repayment has been difficult because the COVID-19 pandemic temporarily closed many theatres, hampering revenues, and the company spent much of the period grappling with the fallout from its failed sale to U.K. theatre company Cineworld Group PLC.
The scuttled $2.8 billion deal wound up in a court battle meant to decide whether Cineworld had the right to walk away from the transaction. A judge sided with Cineplex, but Cineworld made an appeal before it filed for bankruptcy in the U.S. Cineplex has since said it does not expect to meaningfully recoup its costs.
However, the company has had some good fortune in recent months. Barbie drove massive audiences to the cinema chain over the summer and the fall brought the release of popstar Taylor Swift's concert movie.
Many believe Aquaman and the Lost Kingdom, Napoleon, Wonka and Renaissance: A Film by Beyoncé will help Cineplex end 2023 on a high.