Leading exhibitor AMC Entertainment has sold its controlling stake in movie theater ad firm Screenvision to private equity firm Abry Partners for $45 million in cash, though it is retaining a minority interest.
The move is part of the exhibitors stated goal of generating $400 million from non-strategic assets, which it has pursued by selling stakes in other businesses and setting sale-leaseback agreements for seven U.S. theaters. AMCs stock has dropped by 17% over the past two months and more than 50% from its level in 2016 and 2017. While the companys financials have largely been sound in that time, many investors have scrutinized the exhibition sector as it continues to grapple with the evolving media environment and ongoing pressure on traditional release windows.
Screenvision, along with National CineMedia, controls the in-theater ad business. AMC acquired its stake in the company via its acquisition of Carmike in December 2016.
“This sale of Screenvision shares is yet another positive step forward for AMC as we continue to skillfully monetize assets without disturbing in any meaningful way our status and stature as industry leader,” said AMC CEO Adam Aron. Proceeds from the sale will fund the companys main objectives, including deleveraging, share buybacks and dividends, adding new theaters and renovating existing ones with recliner seats and other enhancements.
“We greatly value our partnership with AMC and are delighted our performance delivered against their considered trust and expectations,” said John Partilla, Screenvision Media CEO. “We look forward to further earning our privileged partnership status in the years ahead.”
Abry Partners has invested in a range of media and entertainment properties over the past three decades, including Legendary Entertainment, Media Rights Capital and Nexstar, one of the biggest owners of local TV stations.