Accretive acquisition further diversifies
platform, adds significant scale to complement Sunset Studios sound
stage and production services offering
Hudson Pacific Properties, Inc. (NYSE: HPP) a unique
provider of end-to-end real estate solutions for tech and media
tenants, today announced the acquisition of Quixote Studios, a
leading provider of sound stages and production services to the
entertainment industry, for $360 million before closing costs.
Quixote rents sound stages, cast trailers, trucks, grip and
lighting and other equipment essential for content production. With
its diverse studio offerings, Quixote supports a wide range of
high-quality productions including long-form television and feature
film, as well as short-form content such as high-end photo shoots
and commercials. Hudson Pacific expects the transaction will be
immediately accretive to its financial results.
"Our acquisition of Quixote Studios represents further execution
of our strategy to enhance our core studio business for customers
with a full-service offering of sound stages, both in terms of size
and location, and production services in key global markets," said
Jeff Stotland, Executive Vice President of Global Studios and
Services for Hudson Pacific. "Quixote strengthens our reach to
capture strong secular demand for studio and related assets,
including excess demand at our Sunset Studios locations, and
enables us to achieve immediate economies of scale while further
diversifying our client base."
Quixote is one of the industry’s most recognized brands. Its
largest clients include ABC/Disney, HBO, Sony, Paramount, NBC
Universal and Warner Bros. as well as numerous blockbuster movies
and hit television shows such as Apple’s The Morning Show,
Paramount’s Yellowstone, HBO’s Curb Your Enthusiasm and Insecure,
Disney’s Jungle Cruise and Marvel’s Avengers: Infinity War. Since
its inception in 1995, Quixote has grown its business significantly
in Los Angeles, New York, Atlanta and New Orleans while building a
culture based on service and innovation. Quixote has 325 employees,
over 500 cast trailers, trucks and specialized vehicles, one of the
industry’s largest inventories of grip and lighting and production
equipment, as well as long-term lease rights at attractive rental
rates to 23 sound stages in Los Angeles and three in New
Orleans.
Quixote complements Hudson Pacific’s Sunset Studios portfolio,
which includes more than 60 stages across five lots in Los Angeles
and the UK, and its production services division’s transportation
fleet, which includes more than 1,400 cast trailers, trucks and
specialized vehicles servicing productions in Los Angeles, Atlanta
and Albuquerque.
Mikel Elliott, Founder of Quixote, who will remain in a
leadership position, commented, "Hudson Pacific and Quixote’s
shared purpose is to elevate the production experience for crews on
our collective stages as well as on location in the major global
production markets. Together, we will further innovate, inspire and
solve new production challenges in the era of streaming content and
beyond."
Hudson Pacific financed the acquisition with $200 million of
borrowings from its credit facility plus $160 million deferred
purchase price accruing interest at a 5% rate interest only, due
December 2023, which is secured by substantially all the assets of
and equity interests in the acquired business.
The company has posted a presentation with additional details on
the acquisition here on the Investors section of its website, and
does not expect to update its 2022 guidance before its third
quarter release and earnings call.
Intrepid acted as financial adviser to Hudson Pacific and Latham
& Watkins LLP served as the company’s legal adviser. American
Discovery Capital acted as financial adviser to Quixote and Shepard
Mullin acted as its legal adviser.
About Hudson Pacific Properties
Hudson Pacific Properties (NYSE: HPP) is a real estate
investment trust serving dynamic tech and media tenants in global
epicenters for these synergistic, converging and secular growth
industries. Hudson Pacific’s unique and high-barrier tech and media
focus leverages a full-service, end-to-end value creation platform
forged through deep strategic relationships and niche expertise
across identifying, acquiring, transforming and developing
properties into world-class amenitized, collaborative and
sustainable office and studio space. For more information visit
HudsonPacificProperties.com.
Forward-Looking Statements
This press release may contain forward-looking statements within
the meaning of the federal securities laws. Forward-looking
statements relate to expectations, beliefs, projections, future
plans and strategies, anticipated events or trends and similar
expressions concerning matters that are not historical facts. In
some cases, you can identify forward-looking statements by the use
of forward-looking terminology such as "may," "will," "should,"
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"estimates," "predicts," or "potential" or the negative of these
words and phrases or similar words or phrases that are predictions
of or indicate future events, or trends and that do not relate
solely to historical matters. These statements include, among
others, statements regarding the financial and operational impact
of the Quixote Studios acquisition. Forward-looking statements
involve known and unknown risks, uncertainties, assumptions and
contingencies, many of which are beyond the company's control,
which may cause actual results to differ significantly from those
expressed in any forward-looking statement. All forward-looking
statements reflect the company's good faith beliefs, assumptions
and expectations, but they are not guarantees of future
performance. Furthermore, the company disclaims any obligation to
publicly update or revise any forward-looking statement to reflect
changes in underlying assumptions or factors, of new information,
data or methods, future events or other changes. For a further
discussion of these and other factors that could cause the
company's future results to differ materially from any
forward-looking statements, see the section entitled "Risk Factors"
in the company's Annual Report on Form 10-K filed with the
Securities and Exchange Commission, or SEC, and other risks
described in documents subsequently filed by the company from time
to time with the SEC.
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Investor Contact Laura Campbell Executive Vice President,
Investor Relations & Marketing (310) 622-1702
lcampbell@hudsonppi.com
Media Contact Laura Murray Senior Director,
Communications (310) 622-1781 lmurray@hudsonppi.com
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