Lionsgate said it will merge its Studio Business, which comprises its Television Studio and Motion Picture Group, with Screaming Eagle Acquisition Corp as the company splits the studio division with Starz. The company announced the merger in a statement released on December 22.
Lionsgate will keep 87.3% of the total shares of Lionsgate Studios and the Starz platform. Screaming Eagle public shareholders, founders, and investors will own 12.7% of the combined company. Lionsgate Studios is valued at $4.6 billion.
“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 Jon Feltheimer, chief executive officer at Lionsgate. “Coupled with the acquisition of the eOne platform scheduled to close next week… we’ve put together all of the pieces for a thriving standalone content company with a strong financial growth trajectory.”
Lionsgate has been planning to separate the studio and Starz for nearly two years. The company decided to wait until after it closed the acquisition of eOne from Hasbro to create the standalone studio, which will be announced next week.
The transaction establishes Lionsgate Studios as a standalone publicly traded entity. It is expected to earn Lionsgate $350 million of gross proceeds, which includes $175 million in PIPE financing already committed by mutual funds and other investors. Net proceeds from the deal will enhance Lionsgate’s balance sheet and drive initiatives such as acquiring the eOne business, which is expected to close by the end of this year.
The deal must still meet certain closing conditions, such as regulatory and shareholder approval. It is expected to close in the spring of 2024.
“We are thrilled to be part of establishing Lionsgate Studios as one of the only pure play content companies in the public markets, which is well positioned to unlock value for both existing and new shareholders,” said Eli Baker, chief executive officer for Screaming Eagle. “We believe this will be seen as one of the most innovative and value creating transactions the market has seen in some time.”
Lionsgate’s senior management will discuss the transaction via a live webcast on January 4, 2024, at 5:00 p.m. ET.