Kinepolis acquires 'Landmark Cinemas', Canada's second largest movie theatre group
September 18 2017 - 12:00PM
Regulatory release
18 September 2017, 6 p.m.
Kinepolis Group has reached agreement with the
shareholders of Landmark Cinemas on the acquisition of the Canadian
movie theatre group. The acquisition is subject to Canadian
regulatory approvals including under the Investment Canada Act
(ICA), the Canadian law governing acquisitions by foreign
investors. Kinepolis expects to be able to complete this procedure
by the end of the year. The shareholders of Landmark Cinemas
include the founding management team members of Landmark Cinemas,
Neil Campbell and Brian McIntosh, as well as the Canadian private
equity firm, TriWest Capital.
Landmark Cinemas operates 44 movie theatres of
various sizes, all located in Central and Western Canada, and has
its head office in Calgary (Alberta). The 44 Landmark Cinemas movie
theatres, with a total of 55,000 seats and 303 screens, realized
CAD 156.3 million turnover in 2016 with 10.2 million visitors. The
company is Canada's second largest cinema operator, with a market
share of 10%.
Three quarters of the movie theatres under the
acquisition are leased. The group operates two megaplexes (more
than 16 screens), 17 multiplexes (more than 8 screens) and 25
smaller movie theatres spread over six Canadian provinces. Landmark
Cinemas generates 92% of its turnover in the country's biggest
regions, Ontario, British Colombia and Alberta. Five cinemas have
an IMAX screen, another five are equipped with premium large format
(PLF) screens and 11 complexes offer the recliner seat[1] experience
or are scheduled to do so soon.
Landmark Cinemas expanded significantly in 2013
with the acquisition of Empire Theatres and has since focused on
enhancing the customer experience, with great success.
Eddy Duquenne, CEO of Kinepolis Group, says: "I am
very proud of this unique opportunity to expand our business into a
continent that is expected to offer us many advantages.
Furthermore, Landmark Cinemas shares our passion for customer
experience. It was the first on the market to introduce the Atom
social ticketing system and it successfully upgraded a number of
movie theatres to equip them with recliner seats. The management of
Landmark Cinemas is very enthusiastic and looks forward to rolling
out our three-pillar strategy (of being best cinema operator, best
marketer and best real estate manager) in their group and testing
our products and experience concepts on the Canadian market. We see
it as an opportunity for both groups."
Brian McIntosh (Executive Chairman) and Neil
Campbell (CEO) of Landmark Cinemas say: "The innovative and
entrepreneurial culture that we have been fortunate to build over
the past 52 years at Landmark aligns perfectly with Kinepolis.
Joining the Kinepolis family is a terrific opportunity for everyone
at Landmark. Combining with Kinepolis will also give Canadian
moviegoers greater access to world class cinema experiences.
Landmark's people will continue to lead the Canadian business and
our customers, people and business partners will all benefit from
the expertise that Landmark will be able to leverage into Canada
from the expertise and strategic vision of Kinepolis."
The proposed acquisition fits in with the
expansion strategy pursued by Kinepolis and enables the Group to
enter a new market, characterized by healthy macroeconomic
prospects, a growing population and a favourable business climate.
Entering a new continent creates a better geographic spread of
Kinepolis' business activities and new growth opportunities,
through acquisitions and new-build projects. The agreement with
Landmark Cinemas already includes two new-build projects in Alberta
province, one in St. Albert and one in Fort McMurray. It also
includes plans for more new-build movie theatres.
Kinepolis considers this to be a medium-sized
acquisition from a financial point of view. Annualized and
normalized EBITDA of Landmark Cinemas in 2017 is between CAD 17
million and CAD 18 million. This is after annualization of the
effects of the recliner seat rollout at 11 of the Group's 44 movie
theatres. The annualized and normalized EBITDA contribution per
visitor in 2017 is between CAD 1.7 and CAD 1.8 or between €1.2 and
€1.25 per visitor, which is lower than the Kinepolis Group average.
This is due in part to the fact that leased movie theatres account
for 95% of visitors. Landmark Cinemas generated revenue of
CAD 156.3 million in 2016, with 58.3% from ticket sales,
37.8% from in-theatre sales (ITS), 2.5% from screen advertising and
1.4% from other revenue.
The acquisition has an enterprise value of CAD
122.7 million, corresponding to an acquisition price of around €
84.2 million at an exchange rate of 1.46.
Kinepolis will manage the Canadian company, which
employs 1,450 people, through a local executive management board
made up of the current Landmark Cinemas management and supported by
an integration team that will introduce Kinepolis' management
approaches and concepts from Europe. In doing so, Kinepolis aims to
transfer its self-learning and self-innovating company culture to
the new organization.
(Pictures attached)
Contact
Kinepolis Press Office
+32 (0)9 241 00 16
pressoffice@kinepolis.com
Kinepolis
Kinepolis Group was formed in 1997 by a merger of
two family-run cinema groups and was first listed on the stock
exchange in 1998. Kinepolis proposes an innovative cinema concept
that serves as a pioneering model within the industry. Kinepolis
Group NV has 48 cinemas spread across Belgium, the Netherlands,
France, Spain, Luxembourg, Switzerland and Poland. In addition to
its cinema business, the Group is also active in film distribution,
event organization, screen advertising and property management.
More than 2,300 employees are committed every day to giving
millions of visitors an unforgettable movie experience.
After the proposed acquisition, Kinepolis Group
will operate 92 cinemas (42 of which it owns), with a total of 802
screens and more than 180,000 seats.
[1] High-end,
extra comfortable seats which can be reclined.
Signing KP_Landmark
Landmark Cinema_interior
Landmark_CountryHills_entrance
Landmark_CountryHills_ReclinerAuditorium_edited
Landmark_CountryHills_ReclinerAuditorium
This
announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Kinepolis Group via Globenewswire
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