TORONTO, ONTARIO -- (Marketwired) -- 06/27/13 -- Cineplex Inc. (TSX: CGX) ("Cineplex") today announced it has entered into an agreement to purchase select theatres from Empire Theatres Limited ("Empire") for a cash purchase price of $200 million, subject to certain adjustments to be made at closing.
The purchase includes 24 Empire theatres located in Atlantic Canada - 13 in Nova Scotia, six in New Brunswick, three in Newfoundland, and two on Prince Edward Island. Also included are two Ontario locations in Whitby and Kanata. The 26 theatres will add a total of 218 screens to the Cineplex circuit.
"This is a significant event for Cineplex, as the acquisition will provide our company with a truly national, coast-to-coast presence," said Ellis Jacob, President and CEO, Cineplex Entertainment. "This acquisition is an excellent strategic fit for Cineplex. It provides us with a presence in Atlantic Canada and it will enable us to leverage our existing businesses to maximize shareholder value."
Cineplex will invest in the acquired theatres and may add its proprietary UltraAVX auditoriums, VIP Cinemas and XSCAPE Entertainment Centres to certain locations. The theatres will be rebranded as Cineplex Cinemas.
"We look forward to providing our future guests with an exceptional entertainment experience, including access to the SCENE loyalty program, our popular Front Row Centre Events and our interactive and mobile offerings," said Jacob. "In addition, our media and promotional partners will now benefit from a national platform."
"Cineplex has an excellent track record of delivering incremental value when integrating businesses, through the realization of operating synergies and efficiencies, resulting in increased EBITDA," said Pat Marshall, Vice President Communications and Investor Relations.
For the year ended December 31, 2012, the 26 theatres had total revenues of approximately $113 million. After reflecting expected synergies, management has placed an effective acquisition multiple on the transaction of approximately 8.0x adjusted EBITDA. Management expects the transaction to be immediately accretive to earnings per share and adjusted free cash flow per share.
Closing of the Transaction
Closing of the transaction is subject to customary conditions, including receipt of relevant regulatory approvals and is expected to close in approximately 60 days. Cineplex will submit a request for an Advance Ruling Certificate ("ARC") to the Commissioner of Competition regarding this transaction.
Cineplex has availability under its existing credit facilities to fund the purchase price and will continue to assess its financing options.
Cineplex will hold a conference call for analysts and investors today, June 27, 2013, at 9:30 a.m. Eastern Daylight Time ("EDT") to discuss this announcement in further detail. To join this conference call, please dial 416-644-3415, or if calling from outside of Toronto, dial 1-877-974-0445 at least five to ten minutes prior to 9:30 a.m. EDT. Please quote conference ID# 4627148 to access the call.
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