#Imax to Acquire Full Control of Its China Unit in $124M Deal

Imax has unveiled a deal to acquire a 28.5 percent stake in its Shanghai-based subsidiary that oversees its theatrical business in China and which it does not already control.

Imax currently has around 770 branded commercial locations in China, the most of any market worldwide and a key component of its international expansion outside of North America. The proposed deal to take 100 percent control of Imax China will see the Toronto-based parent acquire 96.3 million shares currently trading on the Hong Kong Stock Exchange in a deal valued at $124 million in cash, or HK$10 per-share.

Once approved, the deal will hand Imax full control of its business in China that was first listed in Hong Kong in 2015 when the parent company retained a 69.8-percent stake in Imax China Holding. Taking full control of the subsidiary comes as China has seen a rebound in theatrical box office coming out of the pandemic.

Once the transaction is completed by the end of the year, Imax said Daniel Manwaring will remain CEO of its unit in China, which will continue to be headquartered in Shanghai, with offices in Beijing. “This deal is a win-win for Imax Corporation and Imax China, as it unlocks significant financial benefits for Imax, while offering Imax China investors a meaningful premium to current market prices,” Richard Gelfond, CEO of Imax, said in a statement on Wednesday.

“The public listing of Imax China raised capital to help fuel a period of tremendous growth for Imax in China, and this transaction has the potential to usher in a new era of expansion for our brand and technology in this thriving market for entertainment,” Gelfond added. The proposed offer for the minority stake in Imax China represents around a 49 percent premium to the 30-trading day average closing price for the Hong Kong market-listed unit, Imax said.

The Canadian-based technologies company added the proposed transaction is expected to secure around $2 million in annual public company cost savings and potential tax efficiencies. Imax will finance the deal through cash on hand and external debt financing.

The first commercial Imax location opened in China in 2007 and Imax China as a subsidiary launched in 2011. Imax has been releasing a mix of Hollywood and local language tentpoles across its Chinese network in recent years.