Adrian J Cotterill, Editor-in-Chief
Cineplex Inc. (TSX: CGX), Canada’s leading entertainment and media company, announced late last week that it has entered into a definitive agreement to sell its digital place-based media division, Cineplex Digital Media to Creative Realities Inc. (CRI).
CRI will acquire all the issued and outstanding common shares of CDM for a total purchase price of $70 million in cash, subject to customary post-closing adjustments.
“Over the past 16 years, Cineplex Digital Media has grown to be an industry leading and award-winning digital solutions company, operating some of the largest digital networks across North America. As we continued to grow CDM, we had said we would remain open to an opportunistic and strategic sale,” said Ellis Jacob, President and CEO, Cineplex. “CRI’s strong offer and this accretive transaction will provide us with meaningful capital to continue to deliver value for our shareholders.”
This transaction is seen by (corporate) Cineplex to capitalize on a timely opportunity to divest and unlock meaningful value. It says that the proceeds of the sale will immediately strengthen Cineplex’s balance sheet and provide capital for opportunistic share buybacks, debt reduction and bolster resources for general corporate purposes subject to certain restrictions under its current debt agreements.
As part of the deal, Cineplex has entered into a long-term agreement to continue as CDM’s exclusive advertising sales agent for CDM operated digital-out-of-home networks across Canada.
The transaction is expected to close in the coming weeks and is subject to regulatory approvals and other customary closing conditions.
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