Cinema exhibitor Regal Entertainment Group (RGC) Tuesday said it signed an agreement with Consolidated Theatres, pursuant to which Regal will purchase Consolidated for nearly $210 million in cash. The transaction, scheduled to close in the first half of 2008, is expected to be accretive to Regal's earnings and cash flows. However, finalization of the deal is pending customary closing conditions. Consolidated Theatres is a Charlotte, New Castle-based theater operator.
The acquisition, comprising 28 theaters with 400 screens, will expand Regal's market in Georgia, Maryland, North Carolina, South Carolina, Tennessee and Virginia.
In its latest third quarter, Regal reported an increase in revenues to $752.9 million from $675.7 million in the same quarter a year ago. Third quarter net income advanced to $58.0 million or $0.36 per share from $29.3 million or $0.19 per share last year.
Mike Campbell, Chairman of Regal stated, Accretive acquisitions are a key component of our overall business strategy and we look forward to a successful closing and integration of the Consolidated Theatre assets during the first half of 2008.
Earlier, Regal Cinemas, a subsidiary of Regal Entertainment, entered into a joint venture with Canadian Entertainment technology company IMAX Corp. (IMAX, IMX.TO) to install five IMAX theatre systems, on a profit-sharing basis.
In December, IMAX reported a joint-venture agreement with theatrical exhibition company AMC Entertainment to install 100 IMAX digital projection systems at AMC locations in 33 major U.S. markets.
The Knoxville, Tennessee-based Regal Entertainment Group is the largest motion picture exhibitor with a theatre circuit comprising Regal Cinemas, United Artists Theatres and Edwards Theatres. The company operates 6,355 screens in 526 locations in 39 states and the District of Columbia.
Shares of RGC, which has been trading in a range of $16.95 to $23.14 in the past twelve months, ended Tuesday's regular trading at $17.03, down $0.30 or 1.73% on a volume of 1.14 million. In after-hours, the stock further slipped $0.05 or 0.27% to trade at $16.98.
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