Moscow, December 13, 2012 – A consortium backing the Moscow based media entrepreneur Paul Heth and consisting of the lead investor Baring Vostok Private Equity, UFG Private Equity and the Russian Direct Investment Fund, announces an investment in Karo Film, one of Russia’s leading cinema chains. The consortium will acquire a controlling shareholding in the company and will additionally support a circa $100 million investment initiative to open new multiplex cinema venues under the Karo brand over the next three years.
Paul Heth has been appointed as Chief Executive Officer of Karo Film. Mr. Heth brings 20 years of development and senior operating experience in the international and Russian cinema industry. Mr. Ogorodnikov and his business partner Oleg Andreev, co-founders of Karo Film will both retain significant stakes in the business. Mr. Ogorodnikov will also continue to serve as its Chairman.
Paul Heth, said: “I am looking forward to working with Leonid Ogorodnikov, and I am excited that with the backing of three of Russia’s leading private equity firms Karo is now positioned to lead the next phase of development of the Russian cinema industry. We will immediately make a substantial investment into Karo’s existing infrastructure to improve and upgrade Karo’s 3D and large format digital projection capacity, improve its food and beverage offerings and will work to enhance the efficiency of the company’s overall operations. In the near future we will also be announcing a number of new locations to include the largest cinema developments ever undertaken in Russia.”
Leonid Ogorodnikov, Chairman of Karo, said: “I was extremely impressed with the caliber of the investment group assembled by Mr. Heth, all of whom are focused on long term value creation. We are very proud that since our founding in 1997 we have grown Karo Film into a major player in the Russian cinema sector. Russia is now one of the world’s most important and fastest growing movie and digital entertainment markets. With this announcement we are positioned to take Karo to the next level.”
Russia is one of the world’s top ten largest theatrical exhibition markets with box office takings in 2012 expected to exceed $1.3bn and forecast to grow strongly into the medium term.
The Karo Film Group was founded in 1997. It established new standards in Russia for movie theatres. Today, Karo Film is a leading motion picture exhibition company owning and operating 31 modern movie theatres comprising of 197 screens in Moscow, the Moscow region, St. Petersburg, Nizhniy Novgorod, Samara, Kazan, Kaliningrad and Surgut and serves nearly 12 million visitors per year, with forecasted sales in 2012 of approximately $190 million.
About Paul Heth
Mr. Heth is widely credited with the revitalization of the Russian cinema sector. In 1993 Mr. Heth co-founded and operated Russia’s first two modern style cinemas. In 1996 Mr. Heth co-founded Kodak Kinomir, which under his leadership was one of the highest grossing and most profitable cinemas in the world. In 2000 Mr. Heth partnered with the American media conglomerate National Amusements (parent company of Viacom and CBS) to design, build and operate unique “next generation” multiplex cinemas in Los Angeles and Philadelphia. In 2002 Mr. Heth with Shari E. Redstone and National Amusements co-founded Kinostar Delux cinemas in Russia, which generated close to 10% of the Russian national box office. Mr. Heth led a successful trade sale of the company in June of 2011. In addition to his activities in theatrical exhibition, Mr. Heth and partners and Sony Pictures Entertainment formed Monumental Pictures in 2005 to produce, market and distribute local language feature films for the Russian theatrical film market.