Newspaper article The Canadian Press

Lionsgate Buys Summit for US$412.5 Million: Lionsgate Buys Summit for US$412.5M

Newspaper article The Canadian Press

Lionsgate Buys Summit for US$412.5 Million: Lionsgate Buys Summit for US$412.5M

Article excerpt

VANCOUVER - Film studio Lions Gate (NYSE:LGF) has acquired Summit Entertainment, the maker of the teen hit ``Twilight'' series.

The price tag of the cash and share deal, announced late Friday, is about US$412.5 million -- but most of that will come from cash that's on Summit's balance sheet.

Lionsgate will pay US$170 million of the purchase price in cash, debt and stock, while Summit will refinance an existing loan with a $500 million credit line, secured by collateral of Summit's assets.

The deal would create a studio among the largest in Hollywood.

It would bring together under one roof ``Twilight'' and another expected popular teen series ``The Hunger Games,'' which Lions Gate is set to release in March.

"They have a tremendous outreach with fans and the ability to reach them through email, Facebook, et cetera," Lions Gate CEO Jon Feltheimer said of Summit. "Starting right now, today, we are going to utilize that institutional knowledge to move "Hunger Games" ahead even more quickly."

Lionsgate is based in Santa Monica, Calif. but has key operations in Vancouver.

Lionsgate said the transaction will expand its 13,000-library of old movies to sell to home video and TV channels and allow it to grow its production and distribution capacity and international sales.

The combined company will also be able to consolidate administration and become more efficient.

"This transaction continues Lionsgate's long-term growth strategy of building a diversified worldwide media company through a combination of disciplined, accretive strategic acquisitions and organic growth while maintaining a solid balance sheet," Feltheimer said.

"We are uniting two powerful entertainment brands, bringing together two world-class feature film franchises to establish a commanding position in the young adult market, strengthening our global distribution infrastructure and creating a scalable platform that will result in significant and accretive financial benefits to Lionsgate shareholders. …

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