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Carmike Buys Movie Theater Chain Digital Cinema Destinations


By Todd Cunningham

Carmike Cinemas will acquire movie theater chain Digital Cinema Destinations, the two companies said Thursday.

The directors of the two companies have agreed on an all-stock deal in which Carmike will absorb all of Digiplex's 21 locations with 206 screens, and five more with 523 screens that it is in the process of acquiring. Each Digiplex share will be exchanged for 0.1775 shares of Carmike common stock.

The transaction is expected to close in the fall and will increase Carmike's footprint to 280 theaters and 2,936 screens in 41 states, making it the fourth-largest exhibitor in the U.S., behind Regal Entertainment Group, AMC Entertainment and Cinemark Theaters. The deal puts Carmike in four new states: Arizona, Connecticut, Maryland and New Hampshire.

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Since its founding in 2010 by Bud Mayo, Digiplex has been in the forefront of the transition to digital projection and a leader in alternative programming, with a a 50 percent interest in the DigiNext distribution platform.

"Carmike strives to be an innovator in the exhibition industry, and we believe the addition of the Digiplex circuit will further enhance those efforts," said David Passman, Carmike's president and chief executive.

"Along with its circuit expansion via opportunistic acquisitions, Digiplex has built an industry-leading alternative programming business, generating approximately 5 percent of admissions revenue, a significantly higher percentage than their larger peers," he added.

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Carmike theaters are in rural or suburban areas with populations under 200,000, and the company bills itself as "America's Hometown Theater." All of the acquired theaters feature digital projection systems, more than 35 percent of the screens are 3D-capable and one, in Surprize, Ariz., has an IMAX auditorium.

Digiplex's CEO Mayo has agreed to vote stock representing 39.5 percent of his company's voting stock in favor of the transaction.

"We view this transaction as a win-win for both organizations. Digiplex holders will benefit by receiving stock in one of the industry-leading exhibitors," he said.

Macquarie Capital acted as financial adviser and King & Spalding acted as legal counsel to Carmike in this transaction. Maxim Group acted as a financial adviser and Eaton & Van Winkle acted as legal counsel to a special panel of the Digiplex board of directors.

The post Carmike Buys Movie Theater Chain Digital Cinema Destinations appeared first on TheWrap.

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