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Group to Buy Loews Cineplex

The private equity investors will pay $1.46 billion for the theaters, part owned by L.A.-based Oaktree.

June 22, 2004|From Times Staff and Wire Reports

A group of private equity investors has agreed to buy theater chain Loews Cineplex Entertainment for $1.46 billion, it was announced Monday.

Buying the chain is a corporation formed by Bain Capital, Carlyle Group and Spectrum Equity Investors. Loews Cineplex is owned by Toronto-based Onex Corp. and Los Angeles equity firm Oaktree Capital Management.

The sale includes more than 200 theaters and 2,200 screens worldwide. Also included is Loews Cineplex's 50% stake in Magic Johnson Theatres owned with the former basketball star.

Loews Cineplex was put on the block earlier this year after merger talks with AMC Entertainment Inc. unraveled.

Other assets being acquired include Loews' operations in the U.S., Grupo Cinemex in Mexico and its 50% interests in Megabox Cineplex of South Korea and Yelmo Cineplex of Spain.

"Thanks in part to an existing theater portfolio that has been recently upgraded, Loews is well positioned to capitalize on the industry's steady growth prospects. The investor group will work closely with the talented management team to grow the business," John Connaughton, a managing director at Bain Capital, said in a news release.

Onex said its share of the cash proceeds was expected to be about $566 million. Onex will continue to own units of Cineplex Galaxy, valued at about $77 million, which operates Loews' theater business in Canada and Galaxy Entertainment.

Onex is a conglomerate with annual revenue of about $12 billion and assets of $10 billion. Oaktree Capital Management is a private investment management firm with about $29 billion in assets.

Bain Capital, based in Boston, is a private investment firm with more than $20 billion in assets under management.

Carlyle Group, based in Washington, also is a private equity firm with more than $18 billion under management.

Spectrum Equity Investors has more than $3 billion in capital under management.

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