Screaming Eagle Acquisition (Nasdaq: SCRMU, SCRM, SCRMW) today announced a definitive agreement to combine with the studio business of Lionsgate (NYSE: LGF.A, LGF.B), which comprises its Television Studio and Motion Picture Group segments and its film and television libraries, to launch Lionsgate Studios Corp.
This ranks among the largest SPAC deals announced in 2023.
The deal positions the standalone Lionsgate Studios as a platform-agnostic, pure play content company with a deep portfolio of franchise properties including The Hunger Games, John Wick, The Twilight Saga and Ghosts, a robust film and television production and distribution business, a leading talent management and production company and a deep film and television library.
As a result of the transaction, 87.3% of the total shares of Lionsgate Studios are expected to continue to be held by Lionsgate, while Screaming Eagle public shareholders and founders and common equity financing investors are expected to own the remaining 12.7% of the combined company. The transaction values Lionsgate Studios at an enterprise value of approximately $4.6 billion. Lionsgate Studios does not include the STARZ platform, which will continue to be wholly owned by Lionsgate.
In addition to establishing Lionsgate Studios as a standalone publicly-traded entity, the transaction is expected to deliver approximately $350 million of gross proceeds to Lionsgate, including $175 million in PIPE financing already committed. Net proceeds from the transaction are expected to be used to enhance Lionsgate’s balance sheet and facilitate strategic initiatives, including those related to the eOne business, which acquisition is scheduled to close by calendar year end.
Common shares of Lionsgate Studios will trade separately from Lionsgate’s Class A (LGF.A) and Class B (LGF.B) common shares as a single class of stock. The transaction is expected to close in the spring of 2024, pending approvals.
Screaming Eagle raised $750 million in a January 2022 IPO.
“This transaction creates one of the world’s largest publicly-traded pure play content platforms with the ability to deliver significant incremental value to all of our stakeholders,” said Lionsgate CEO Jon Feltheimer and Vice Chair Michael Burns. “Coupled with the acquisition of the eOne platform scheduled to close next week, the expansion of our partnership with 3 Arts and the strong performance of our content slates, we’ve put together all of the pieces for a thriving standalone content company with a strong financial growth trajectory.” Read more.
