Lionsgate Studios Splits From Starz In SPAC Deal – Deadline

Lionsgate‘s long-gestating plan to separate the studio with Starz is lastly a go as the corporate introduced as we speak that Studios — the TV studio, movement image group and movie and tv libraries —  will merge with Screaming Eagle Acquisition Corp., a SPAC (particular function acquisition firm) led by Eli Baker.

The transaction values Lionsgate Studios at an enterprise worth of roughly $4.6 billion (vs a present market cap for Lionsgate of $2.5 billion).

The separation is anticipated to shut this spring turning Lionsgate Studios into one of many largest international pure-play publicly-traded content material corporations and the hope is, a beautiful acquisition goal — including extra gas to the media M&A chatter already in full swing. The Studios’ portfolio contains franchise properties The Starvation Video games, John Wick, The Twilight Saga and Ghosts; a strong movie and tv manufacturing and distribution enterprise; a number one expertise administration and manufacturing firm; and a big movie and tv library that throws off important money.

Lionsgate has deliberate for almost two years to separate the studio and Starz. CEO Jon Feltheimer in August anticipated the information coming within the first quarter of 2024. Market circumstances had been an element, and the concept in any case was to attend till the corporate closed its acquisition of eOne from Hasbro, which might be introduced subsequent week.

The SPAC ingredient is attention-grabbing. These are empty vessels that go public, elevate money and have two years to finish a merger with an precise firm. SPACS pattern out and in on Wall Road however Screaming Eagle has distinguished pedigree. Its chaired by Harry Sloan, a longtime media government and present Lionsgate board member, who has stood up a number of the earliest and most profitable SPACs in media and leisure in partnership with Jeff Sagansky and others. Saganksy is a Screaming Eagle director.

On account of the transaction, 87.3% of the full shares of Lionsgate Studios are anticipated to proceed to be held by Lionsgate, whereas Screaming Eagle public shareholders and founders and customary fairness financing buyers are anticipated to personal an combination of roughly 12.7% of the mixed firm. 

Lionsgate Studios doesn’t embody the Starz platform, which is able to proceed to be wholly owned by Lionsgate.

Along with establishing Lionsgate Studios as a standalone publicly traded entity, the transaction is anticipated to ship roughly $350 million of gross proceeds to Lionsgate, together with $175 million in PIPE (non-public funding in public fairness) financing already dedicated by main mutual funds and different buyers.

Internet proceeds from the transaction are anticipated for use to reinforce Lionsgate’s steadiness sheet and facilitate strategic initiatives, together with these associated to the eOne enterprise.

Frequent shares of Lionsgate Studios will commerce individually from Lionsgate’s Class A (LGF.A) and Class B (LGF.B) frequent shares as a single class of inventory.  

The deal is topic to some closing circumstances together with regulatory approvals and approval from the shareholders and public warrant holders of Screaming Eagle.

“This transaction creates one of many world’s largest publicly-traded pure play content material platforms with the power to ship important incremental worth to all of our stakeholders,” stated stated Feltheimer and Lionsgate Vice Chair Michael Burns. 

“Coupled with the acquisition of the eOne platform scheduled to shut subsequent week, the enlargement of our partnership with 3 Arts and the robust efficiency of our content material slates, we’ve put collectively the entire items for a thriving standalone content material firm with a robust monetary progress trajectory.”

“We’re thrilled to be a part of establishing Lionsgate Studios as one of many solely pure play content material corporations within the public markets, which is effectively positioned to unlock worth for each current and new shareholders,” stated Screaming Eagle CEO Eli Baker.  “We imagine this might be seen as one of the vital progressive and worth creating transactions the market has seen in a while.”