Lionsgate has bought out Summit Entertainment for US$412.5m – a deal that brings The Hunger Games and the Twilight saga under one roof.
The deal, announced late Friday, will see Lionsgate, which is based in both Canada and the US, put up US$170m in cash, debt and stock, while Santa Monica-based Summit will refinance an existing loan with a US$500m credit line, secured by collateral of its assets.
The deal makes Lionsgate one of the larger studios in Hollywood – expanding greatly both its library of 13,000 films, sold to the broadcast and home video markets, and its production efforts. The Summit library includes The Hurt Locker, Red, the upcoming release Man on a Ledge and other in-house and third-party titles. The company releases on average of 10 to 12 films per year.
“This transaction continues Lionsgate’s long-term growth strategy of building a diversified worldwide media company,” said Lionsgate co-chairman and CEO Jon Feltheimer and vice chairman Michael Burns in a joint statement.
Lionsgate is due to release The Hunger Games, expected to be a major entry into the youth market, on March 23, following in the footsteps of the Twilight saga which released the first part of its fourth installment, Breaking Dawn, in November. Part two is due in late 2012.
Lionsgate also produces and distributes notable TV series including Mad Men, Nurse Jackie and Boss – though it was stung at the box office last summer by the flops like Conan the Barbarian and Abduction.
The company said both brands would continue to produce and distribute , though it expects to consolidate some of the back-end administrative divisions. Co-chairmen Rob Friedman and Patrick Wachsberger, are expected to stay on atop the Summit brand.
The deal is the latest in a series of acquisitions by Lionsgate, which over the years has swallowed companies including Trimark, Artisan, Redbus, Debmar-Mercury and Mandate. It also follows a lengthy boardroom battle with stockholder Carl Icahn who sought to take control of Lionsgate in 2010.
Lionsgate sold off its Maple Pictures unit – a Canadian distributor in the theatrical, TV and digital markets – last year to Alliance Films for US$39.2m in a bid to refill the war chests it drained during its fight with Icahn.