LEAWOOD, KAN. — In a blockbuster merger, AMC Theatres (NYSE: AMC) has agreed to purchase all of the outstanding shares of Carmike Cinemas Inc. (NASDAQ: CKEC) for $30 per share in cash.
The transaction — valued at approximately $1.1 billion including the assumption of debt — creates the largest chain of movie theaters in the United States and the world.
The purchase price per share represents an approximate 19.5 percent premium to Carmike’s closing stock price on Thursday, March 3. The purchase price per screen is approximately $376,000.
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AMC currently has 5,426 screens at 387 theaters, located primarily in the United Sates, including many in the nation’s top markets. Carmike has 2,954 screens at 276 theaters, primarily located in mid-size, non-urban communities. Together, AMC and Carmike will have well over 600 theater locations in 45 states across the country, including the District of Columbia.
The deal, which has been approved by the board of directors at both AMC and Carmike is expected to close by the end of this year.
“By broadening AMC’s geographic and demographic base for delivering our groundbreaking guest experience innovations in comfort and convenience — such as plush power-recliners, enhanced food and beverage, premium sight and sound, greater guest engagement and targeted programming — AMC is poised to deliver the best possible movie experience to more moviegoers than ever before,” says Adam Aron, president and CEO of Leawood, Kan.-based AMC.
David Passman, president and CEO of Columbus, Ga.-based Carmike, describes the merger as a transformative milestone for Carmike and one that provides significant value to Carmike shareholders.
“By joining with AMC, we are bringing together two highly complementary theater footprints and a shared commitment to service and innovation, positioning the combined company to deliver an even more compelling movie-going experience in many more locations across the country,” explains Passman.
The deal is expected to result in annual cost synergies of $35 million and reduce general and administrative expenses by combining back-of-the-house functions such as accounting, finance and technology. The combined company will be based in Leawood. Aron will serve as president and CEO, while Craig Ramsey will serve as executive vice president and CFO.
The transaction, which has fully committed financing in place, will be funded through a combination of existing liquidity, including cash on hand, and incremental debt. Citigroup Global Markets Inc. is providing the debt financing commitment.
Citi is serving as the financial advisor to AMC, and Husch Blackwell LLP is serving as AMC’s lead legal advisor. J.P. Morgan Securities LLC is serving as the financial advisor to Carmike. King & Spalding LLP is providing legal counsel to Carmike.
Carmike’s stock price closed on Thursday, March 3, at $25.11 per share, down from $30.87 a year ago. AMC’s stock price closed on Thursday, March 3, at $25.70 per share, down from $34.86 a year ago.
— Christina Cannon