Lionsgate CEO Jon Feltheimer made his pitch to investors Thursday on his company’s plans to split their film studio from Starz via a Special Purpose Acquisition Company (SPAC) deal.
“We had a number of options available for executing this step in our overall strategic plan. We believe that we selected the best option for aligning with our goal of a full separation, raising capital efficiently with substantial proceeds available to deliver, and establishing an appropriate valuation for our studio supported by blue chip investors,” Feltheimer said.
In the SPAC deal, Lionsgate’s TV and Motion Picture Groups, along with a 20,000-title library expanded by the company’s recent purchase of eOne from Hasbro, will be combined with SPAC company Screaming Eagle Acquisition Corp. to form a new entity called Lionsgate Studios Corporation that will be able to raise fresh capital as a publicly traded company.
Feltheimer said that the transaction “enables us to raise $350 million of total proceeds to accelerate deleveraging and to facilitate strategic initiatives like the eOne acquisition” as well as an equity investment in talent management and production company 3Arts Entertainment. He also said that the split will allow Lionsgate Studios to have unique value as “one of the only pure play studios in the market today.”
“The transaction will not limit the studio’s ongoing working relationship with STARZ, which remains a wholly owned subsidiary of parent company Lionsgate,” Feltheimer added. “STARZ will have the ability to continue strengthening its position as a profitable, premium SVOD platform with a domestic content strategy focused on valuable core demos, a largely digital subscriber base and a continued reliable supply of content from the Lionsgate Television and Motion Picture Groups.”
