National CineMedia Acquires Screenvision

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National CineMedia, Inc. has entered into a definitive merger agreement with Screenvision, for $375 million of cash and stock on a debt free, cash free basis. National CineMedia Inc. is the managing member and owner of 45.8% of National CineMedia, LLC (NCM LLC), the operator of the largest in-theatre digital media network in North America.

Following the merger, NCM, Inc. will evaluate whether to contribute the Screenvision assets to NCM LLC. Under no obligation to do so, NCM, Inc. expects to contribute the Screenvision assets and debt incurred in financing the acquisition to NCM LLC in exchange for approximately 9.9 million NCM LLC membership units. The combined operation will result in an estimated $30 million of annual operating cost synergies. The merger will create a video advertising network that will cover nearly all 210 Designated Market Areas across 50 states, and this network will deliver to approximately 3,900 theaters with over 34,000 screens, reaching over 1.1 billion annual patrons.


Under the terms of the agreement, National CineMedia will pay Screenvision’s owners a total purchase price of $225 million in cash and $150 million of National CineMedia's common stock (approximately 9.9 million shares, based upon a fixed price of $15.15 per share), subject to a net working capital purchase price adjustment.

National CineMedia’s Chairman and CEO Kurt Hall said, “Our merger agreement with Screenvision will position the combined new company to be more competitive in the expanding video and overall advertising marketplace, including the new online and mobile advertising platforms. With the investments we will be making to create one more efficient national network, we will bring more advertising revenue to our theatre circuit partners and a higher quality pre-show to their patrons.”

Mr. Hall concluded, “Technology continues to empower consumers to watch programming how and when they want and view advertisements if they want; with our broader network reach and improvements to our audience targeting capabilities, our theatre network will become the one place where brands are comfortable and their ads are being seen.”

The acquisition has been unanimously approved by the boards of directors of both National CineMedia and Screenvision, as well as Screenvison’s equity owners, and is expected to close after the receipt of regulatory approvals and the satisfaction of other customary closing conditions.

National CineMedia was advised in this transaction by J.P Morgan as financial advisor and Sherman & Howard LLC and Dechert LLP as legal counsel. Moorgate Partners and GreenbergTraurig, LLP advised National CineMedia's independent directors. Barclays is acting as exclusive financial advisor to Screenvision and legal counsel to Screenvision is Latham & Watkins LLP.

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