Imax sells 20% of Chinese unit to local investors for $80M
Imax China planning to seek initial public offering
Canada-based cinema chain Imax Corp plans to sell 20 per cent of its Chinese subsidiary to two local investors, in a move that could help lead to a public offering for Imax China Holding Inc.
Imax issued a statement Tuesday saying it would sell one fifth of Imax China to investment fund China Media Capital and private equity firm FountainVest Partners in a deal valued at $80 million US. Each partner is to pay $40 million US for equal 10 per cent shares.
Imax, with headquarters in New York, Toronto and Los Angeles, will keep majority control.
China Media Capital is headed by businessman Li Ruigang, who is also involved in a Chinese joint venture with U.S. film studio DreamWorks Animation SKG Inc.
Imax, which specializes in large-screen 3D projection, has 173 screens in China and plans to open around 240 more over the next five years to tap the growing appetite for entertainment in the country.
Strengthening ties with local businesses will help smooth the way in a rapidly growing market that had box office of 21.8 billion yuan ($3.5 billion) last year, according to the IMAX CEO Richard Gelfond.
"At this juncture, it makes sense to bring in Chinese investors to help us better address local market dynamics and further optimize our business in China," Gelfond said in the statement, adding China was an "enormously complex market.”
The cinema chain also confirmed that it planned to list its Chinese subsidiary, though it did not say where it would list.
The Wall Street Journal reported that Imax China plans a Hong Kong listing, but listing in Shenzhen or Shanghai are also possible.
China accounts for about 20 per cent of Imax revenue — about $56.5 million last year — its 2013 earnings report showed.
With files from Associated Press, Reuters