Carmike Cinemas, Inc.
(NASDAQ:CKEC), a leading entertainment, digital cinema and 3-D motion picture exhibitor, announced today the signing of a definitive agreement to purchase nine entertainment complexes with an aggregate of 147 screens located in Florida, California and Illinois from Muvico Entertainment, L.L.C. (dba Muvico Theaters) for $31.75 million in cash. All assets and obligations being acquired are subject to customary accounting adjustments to reflect acquisition date fair value as well as the reclassification of certain lease related obligations. The transaction is expected to close in the fourth quarter of 2013.
Upon closing, Carmike’s theatre portfolio will increase to 257 theatres with an aggregate of 2,681 screens in 37 states. The acquisition is projected to add incremental revenue of $68 million and, after general and administrative synergies, pro forma EBITDA of $5.4 million to Carmike’s financials for the trailing twelve month period ended August 31, 2013. A reconciliation of net income to pro forma EBITDA (a non-GAAP measure) is included below.
Carmike Cinemas’ President and Chief Executive Officer David Passman stated, “This opportunistic acquisition of nine premium properties in three states will further increase our revenue and operating base and represents another excellent opportunity to expand our platform in attractive, complementary markets. Consistent with Carmike’s stated acquisition criteria, this transaction presents a number of operational and cost synergy opportunities.
“Similar to Carmike, Muvico is a cinema technology leader and industry pioneer, with recent capital expenditures for digital projection system upgrades, IMAX and MuviXL large format screens, installations of cutting-edge sound, reserved seating and ticket kiosks, as well as additional facility enhancements. We expect limited incremental maintenance capital expenditures on these acquired facilities over the near-term.
“The acquisition also will bring two Bogart’s Bar & Grill restaurants to our circuit at the Thousand Oaks, Calif. and Rosemont, Ill. complexes, furthering our entry into the full-service food and beverage arena. A majority of the theatres have beer and wine service, as well as on-site entertainment centers, party rooms and conference facilities.