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MGM buys out EPIX partners for $1bn

MGM is to acquire all of the interests in premium pay-TV network EPIX of fellow partners Viacom, Lionsgate and Paramount  for approximately $1.032 billion (€0.970bn), based on a total value for the company of $1.275 billion (inclusive of $75 million of distributions to the partners). Viacom and Lionsgate currently own 49.76 per cent and 31.15 per cent equity interests, respectively. Under the deal, Paramount Pictures and Lionsgate will have multi-year agreements to continue bringing first-run theatrical output to EPIX.

This transaction advances MGM’s strategic growth initiatives, closely following the company’s recent expansion of its premium content capabilities with its 2016 acquisition of United Artists Media Group. The deal will give MGM control over EPIX’s four linear pay-TV channels (EPIX, EPIX2, EPIX Hits, EPIX Drive-In) which are available across the US via cable, satellite and telco distributors. EPIX is also available through a range of digital distributors.

Ranked as the fastest-growing premium network over the past five years, EPIX offers the largest selection of movies available on any network, with approximately $4 billion in box office hits. As part of the transaction, Paramount Pictures and Lionsgate will continue to provide their first-run theatrical releases to EPIX under multi-year agreements.

EPIX’s content also features original programming including its critically-acclaimed original series Berlin Station, Golden Globe nominated Graves and, premiering in 2017, Get Shorty, as well as original documentaries, music and comedy specials. Launched in October 2009, EPIX pioneered the development and proliferation of ‘TV Everywhere’, allowing subscribers to watch the content they want, when and where they want.

“The addition of EPIX provides MGM with a premier distribution platform that complements our strong stable of new and library content in both film and television. The acquisition creates increased revenue diversity, new opportunities for growth, and earnings accretion for the benefit of stockholders,” said Gary Barber, Chairman and CEO of MGM. “I would like to thank Jon Feltheimer and his colleagues at Lionsgate and Bob Bakish and his colleagues at Viacom and Paramount, for their unwavering commitment to building the value of this premium service, and their continued commitment to provide their theatrical releases for years to come. We also look forward to welcoming Mark Greenberg and his team to the MGM family. With Mark’s strong leadership and dedicated management team, EPIX’s innovative platform and premium film and television content, EPIX is well positioned to capitalise on the evolving patterns of content consumption in a dynamic distribution landscape.”

“Together with our partners, we are proud to have built EPIX into a strong, differentiated and valuable brand,” declared Bob Bakish, President and Chief Executive Officer of Viacom. “As Viacom executes against its new strategy, we welcome the opportunity to strengthen our balance sheet by realising the value of our equity investment, while also extending the successful commercial partnership between EPIX and Paramount Pictures with a new multi-year output agreement. MGM will be an outstanding steward of the network, and we look forward to working with EPIX to bring its subscribers even more premium entertainment for years to come.”

“With our partners at MGM and Viacom, we are proud to have built a technologically advanced, consumer-facing platform driven by great content,” said Lionsgate Chief Executive Officer Jon Feltheimer. “Though we are shifting our investment focus to our wholly-owned platforms, we wish CEO Mark Greenberg and the rest of the EPIX team, along with Gary Barber and his colleagues at MGM, great success in continuing EPIX’s strong growth in the future.”

Mark Greenberg, President and CEO of EPIX said the agreement between the founding partners reflected the significant value already created in this joint-venture, while acknowledging the accelerated growth potential of EPIX with a single, focused and committed owner. “We are proud to have built this very successful business and we want to thank our partners for their investment, strategic engagement and support since our founding. The Lionsgate and Viacom priorities have evolved in recent months, and now is the right time for them to capitalise on their initial investment and focus their attention on their other businesses, while they continue to provide EPIX with great studio movies and original series for years to come. As we look forward, we are excited about the future of EPIX as a wholly-owned business of MGM. Gary Barber and the team at MGM have the resources, understanding and dedication to our near and long-term success that are essential in this rapidly evolving media and entertainment landscape where the power of great content is critically important.”

The transaction is subject to regulatory approval and is anticipated to close this month.

Launched in October 2009, EPIX became profitable in its first year of existence and has been recognised by SNL Kagan as the fastest growing premium network for the last five years. A pioneer in the development and proliferation of ‘TV Everywhere’, EPIX was the first premium network to provide multi-platform access to its content online at EPIX.com and to launch on Xbox, PlayStation, Android phones and tablets, and Roku players.

EPIX is also available across Apple TV, iPhone and iPad, TiVo, Chromecast, Android TV and more, delivering more movies than any other network with thousands of titles available for streaming. The premium network is offered nationwide through cable, satellite, telco and digital distributors.

 

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