Pop icon Dick Clark reached an agreement Thursday to sell his independent television production company, which produces shows such as "Dick Clark's New Year's Rockin' Eve," and the "Golden Globe Awards," to a group of private investors for $140 million, the company said.
Clark, 72, will remain chairman and chief executive of the company that he formed in 1957--the year his show, "American Bandstand," made the leap from a local Philadelphia production to a national audience on the ABC network.
The investors acquiring Dick Clark Productions Inc. include Mosaic Media Group, Capital Communications CDPQ Inc. and entertainment industry veteran Jules Haimovitz, who will become vice chairman of Dick Clark Productions.
"We can bring our talents and resources of these different companies and take [Dick Clark Productions] to the next level," said Haimovitz, former president of Spelling Entertainment Inc. and a consultant to Metro-Goldwyn-Mayer Inc. "We're hoping to grow into a much larger corporate entity."
The partners agreed to pay $14.50 a share in cash to shareholders with the intent of taking the company private. Clark will receive $12.50 a share, but he plans to reinvest an undisclosed amount back into the new partnership. Clark owned more than 70% of the company, making his holdings worth nearly $95 million.
How much cash Clark will receive was not disclosed. The investors also would not say what percentage of the company each of them would own, although none will have a majority interest. The company's assets include $65 million in cash and a decades-spanning film library that includes classic clips of music personalities, from Chubby Checker to Frankie Avalon.
The company will remain in Burbank and continue to operate as an independent production firm.
Shares of the company soared Thursday after the announcement, closing up $3.37 to $14.30 in Nasdaq trading, an increase of nearly 31%.
The company had sales of $70.8 million in the last fiscal year and made $5.2 million in profit--a 50% drop from the previous year. In the latest quarter ended Sept. 30, 2001, the company reported a loss of $275,000, due mainly to a slowdown in television production and losses from a chain of "Dick Clark American Bandstand," casual restaurants.
Clark was traveling on Thursday and could not be reached for comment. But Francis C. La Maina , president and chief operating officer for Dick Clark Productions, downplayed speculation that the seemingly ageless showman was selling the company because he wanted to slow down.
"Dick will remain as active as he has ever been," said La Maina, who has worked with Clark for 35 years. "He will continue to work until he can't work any more. His work is his love."
La Maina, who will also stay on in his current position, said the investors have promised to bring additional capital to expand Dick Clark Productions: "We'd like to explore other opportunities in other areas of television, not only events, but other areas."
La Maina, Haimovitz and Allen Shapiro, Mosaic's president, all declined to discuss targets for acquisition or potential projects to grow Dick Clark Productions.
Much of the company's value comes from its library of film clips. In addition to "American Bandstand," which went off the air in 1989, the company has produced "TV's Bloopers and Practical Jokes," "The American Music Awards," "Daytime Emmy Awards" and the "Academy of Country Music Awards."