AMC Networks has entered a definitive agreement to acquire RLJ Entertainment for an aggregate value of US$274 million.
RLJ Entertainment is the owner of two SVOD services, Acorn TV, the British content streamer that serves US audiences, and UMC (Urban Movie Channel). Together the services have over 800,00 subscribers.
RLJ also has a controlling interest to an Agatha Christie library, providing the company with extensive IP licensing opportunities.
On completion of the merger RLJ will become a privately owned subsidiary of AMC, with the founder, Robert L. Johnson, and his affiliates owning a 17% stake.
This was after, in October 2016, AMC formed a strategic partnership, where it invested US$65 million in RLJ in the form of loans. In June 2017, the company added US$10 million in these loans.
Josh Sapan, president and CEO of AMC Networks said: “This acquisition furthers AMC Networks’ digital strategy by meaningfully accelerating our interests in direct-to-consumer ad-free subscription services that we own and control, in addition to providing us with access to strong IP as we continue to diversify our revenue opportunities, placing AMC Networks in a stronger position over the long term.”
Scott R. Royster, RLJ Entertainment’s lead independent director and a member of RLJ Entertainment’s Special Committee of the Board established to evaluate, negotiate and determine whether to approve AMC’s going-private proposal, added: “Our mission during the transaction process was to carefully evaluate AMC’s proposal and negotiate the best price and overall deal terms attainable for the Company’s non-affiliate common stockholders.
“The going-private transaction with AMC provides stockholders with immediate liquidity, and the merger price represents a substantial premium to the company’s unaffected stock price.”
AMC’s agreement to acquire RLJ for $6.25 per share is 47% a premium over its $4.25 per share offer in February.