Imax sells one-fifth interest in Chinese subsidiary
Patrons watch a 3D IMAX movie in Beijing, China. (AP / Ng Han Guan)
The Associated Press
Published Tuesday, April 8, 2014 9:16AM EDT
NEW YORK -- Imax Corp. (TSX:IMX) is selling a 20 per cent interest in its Chinese subsidiary for US$80 million to two private equity firms as a preliminary step towards an eventual public offering of Imax China stock.
The North American theatre technology company, which makes systems for producing and showing 3D and big-screen movies, says the new investors in Imax China are CMC Capital Partners and FountainVest Partners.
Imax China will remain a subsidiary of Imax, which has its origins in Canada but is now headquartered in New York, Toronto and Los Angeles.
Imax chief executive Richard Gelfond said Tuesday that the strategic investments from CMC Capital and FountainVest will help to continue expansion in China and provide a step towards spinning off Imax China into a separate publicly traded company.
Imax's screen count in China has doubled since 2011 to 173 screens open, with an additional 237 in backlog as of Dec. 31, 2013.
"China is an enormously complex market in which we have accomplished quite a bit over the last 15 years," Gelfond said in a statement.
"At this juncture, it makes sense to bring in Chinese investors to help us better address local market dynamics and further optimize our business in China, including both our core theatre business as well as new business initiatives such as the home theatre joint venture we announced last year with TCL."
The two private equity firms will pay the first installment of the acquisition price on Tuesday and the remainder in early 2015.