Carmike Cinemas Inc., a leading entertainment, digital cinema and 3-D motion picture exhibitor with establishments in Elkhart and Fort Wayne, announced the signing of a definitive agreement to purchase 16 entertainment complexes with an aggregate of 251 screens based in seven states and 13 individual markets from Rave Reviews Cinemas LLC, a portfolio company of BV Investment Partners. The purchase price consists of $19 million in cash, subject to customary working capital adjustments, and $100.4 million of assumed lease obligations, comprised of capital leases and financing obligations.
The acquisition will add Adjusted EBITDA of $23.6 million on a pro forma basis for the twelve months which ended on June 28.
Carmike Cinemas President and Chief Executive Officer David Passman stated, “The addition of these 16 state-of-the-art theatres and 251 screens from Rave is a key, opportunistic development for Carmike as we recently embarked on a corporate mission of expanding our footprint to 300 theatres and 3,000 screens through attractive acquisitions. Importantly, seven of these theatres are leaders in their respective markets and another four are the number two box office generators in their region. The average age of the properties we are acquiring is only eight years so we expect limited maintenance capital expenditure requirements on the facilities over the near-term. We also look forward to enthusiastically welcoming the Rave associates at these theatres to the growing Carmike family.”
The 16 theatres are currently managed by Rave Cinemas, LLC under the “Rave Motion Pictures” brand. All 251 auditoriums are state-of-the-art with full digital projection and stadium seating. Approximately 40 percent of the screens are 3-D-capable and seven theatres include IMAX® large format screens. Carmike already has 14 Big D large format digital experience screens in place throughout the country. Of the 16 theatres being acquired, six are located in Alabama, four in Florida, two in Indiana, and one each in Illinois, Pennsylvania, Tennessee and Texas.
All 251 screens are participants in the Screenvision Cinema Network. The following table lists the theatres being acquired in Indiana and Illinois.
IN Fort Wayne Jefferson Point 18
IN Indianapolis Metropolis 18
IL Peoria Grand Prairie 18*
Carmike expects to complete the acquisition in the fourth quarter, subject to customary closing conditions. The assumed lease obligations are subject to customary accounting adjustments to reflect the acquisition date fair value of such obligations.