MGM To Acquire Full Ownership Of EPIX
April 6, 2017
will acquire the 80.91% aggregate membership interests in EPIX held by
Viacom, Paramount and Lionsgate for approximately $1.032 billion, based
on a total value for the company of $1.275 billion (inclusive of $75
million of distributions to the partners). Viacom and Lionsgate
currently own 49.76% and 31.15% equity interests, respectively.
This transaction advances MGM's strategic growth initiatives, closely
following the company's recent expansion of its premium content
capabilities with its 2016 acquisition of United Artists Media Group.
The deal will give MGM control over EPIX's four linear pay television
channels (EPIX, EPIX2, EPIX Hits, EPIX Drive-In) which are available
across the U.S. via cable, satellite and telco distributors. EPIX is
also available through a range of digital distributors.
The fastest-growing premium network over the past 5 years, EPIX offers
the largest selection of movies available on any network, with
approximately $4 billion in box office hits. As part of the transaction,
Paramount Pictures and Lionsgate will continue to provide their
first-run theatrical releases to EPIX under multi-year agreements.
EPIX's content also features original programming including its
critically acclaimed original series Berlin Station, Golden Globe
nominated Graves and, premiering in 2017, Get Shorty, as well as
original documentaries, music and comedy specials. Launched in October
2009, EPIX pioneered the development and proliferation of "TV
Everywhere," allowing subscribers to watch the content they want, when
and where they want.
"The addition of EPIX provides MGM with a premier distribution platform
that complements our strong stable of new and library content in both
film and television. The acquisition creates increased revenue
diversity, new opportunities for growth, and earnings accretion for the
benefit of stockholders," said Gary Barber, Chairman and CEO of MGM. "I
would like to thank Jon Feltheimer and his colleagues at Lionsgate and
Bob Bakish and his colleagues at Viacom and Paramount, for their
unwavering commitment to building the value of this premium service, and
their continued commitment to provide their theatrical releases for
years to come. We also look forward to welcoming Mark Greenberg and his
team to the MGM family. With Mark's strong leadership and dedicated
management team, EPIX's innovative platform and premium film and
television content, EPIX is well positioned to capitalize on the
evolving patterns of content consumption in a dynamic distribution
Bob Bakish, President and Chief Executive Officer of Viacom, said:
"Together with our partners, we are proud to have built EPIX into a
strong, differentiated and valuable brand. As Viacom executes against
its new strategy, we welcome the opportunity to strengthen our balance
sheet by realizing the value of our equity investment, while also
extending the successful commercial partnership between EPIX and
Paramount Pictures with a new multi-year output agreement. MGM will be
an outstanding steward of the network, and we look forward to working
with EPIX to bring its subscribers even more premium entertainment for
years to come."
"With our partners at MGM and Viacom, we are proud to have built a
technologically advanced, consumer-facing platform driven by great
content," said Lionsgate Chief Executive Officer Jon Feltheimer. "Though
we are shifting our investment focus to our wholly-owned platforms, we
wish CEO Mark Greenberg and the rest of the EPIX team, along with Gary
Barber and his colleagues at MGM, great success in continuing EPIX's
strong growth in the future."
The transaction is subject to regulatory approval and is anticipated to
close this month.
on the transaction, Mark Greenberg, President and CEO of EPIX said,
"This agreement between our founding partners MGM, Lionsgate and Viacom
reflects the significant value already created in this joint-venture,
while acknowledging the accelerated growth potential of EPIX with a
single, focused and committed owner. We are proud to have built this
very successful business and we want to thank our partners for their
investment, strategic engagement and support since our founding. The
Lionsgate and Viacom priorities have evolved in recent months, and now
is the right time for them to capitalize on their initial investment and
focus their attention on their other businesses, while they continue to
provide EPIX with great studio movies and original series for years to
come. As we look forward, we are excited about the future of EPIX as a
wholly-owned business of MGM. Gary Barber and the team at MGM have the
resources, understanding and dedication to our near and long-term
success that are essential in this rapidly evolving media and
entertainment landscape where the power of great content is critically
MGM is the home to such hit television series as the Emmy® Award and
Golden Globe® Award winning limited series "Fargo" on FX; the critically
acclaimed epic drama series "Vikings" on HISTORY; the fan favorite drama
"Teen Wolf" on MTV; and the highly-anticipated dystopian drama series
"The Handmaid's Tale" on Hulu; MGM has several series in production
including "Get Shorty" for EPIX and will begin production on "Condor"
for AT&T's Audience Network.
LionTree Advisors served as financial advisor to Viacom and Lionsgate.
Latham & Watkins LLP served as legal advisors to MGM, Shearman &
Sterling LLP served as legal advisors to Viacom and O'Melveny & Myers
LLP served as legal advisors to Lionsgate.