Lionsgate is demerging its studio business into a company that will trade on the Nasdaq in a deal that values the business at $4.6 billion (€4.18bn), including debt.

The acquisition by Screaming Eagle Acquisition. a special purpose acquisition company, will create Lionsgate Studios, owner of franchise properties including the The Hunger Games, John Wick (pictured) and The Twilight Saga, the company said. The transaction doesn’t include the Starz platform, which will continue to be wholly owned by Lionsgate.

The separation concludes roughly two years of considering various options for its divisions, including selling or spinning off cable and streaming service Starz, spinning out its film and TV business, or selling all of Lionsgate.

The deal also effectively unravels Lionsgate’s acquisition of Starz for $4.4 billion in 2016. The business model of Lionsgate Studios will now see it sell its library of film and content to bidders such as Netflix instead of having to invest in a much smaller, competing streaming service.

As a result of the transaction, 87.3 per cent of Lionsgate Studios shares will be held by Lionsgate, while Screaming Eagle public shareholders and founders and common equity financing investors are expected to own about 12.7 per cent of the combined company. The deal is expected to raise about $350 million in total gross proceeds, according to the company. Lionsgate said it would use proceeds from the transaction to boost its balance sheet and help facilitate strategic initiatives, including those related to the acquisition of eOne.

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Categories: Articles, Business, M&A

Tags: eOne, john wick, Lionsgate, starz