Click to Skip Ad
Closing in...

Lionsgate In Negotiations To Acquire 3 Arts Entertainment

Lionsgate 3 Arts Entertainment

EXCLUSIVE: Lionsgate Entertainment is in advanced negotiations to acquire top management/production company 3 Arts Entertainment, sources said. I hear Lionsgate is in talks to buy 50% of 3 Arts with an option to acquire the remaining 50% in five years.

Details about the deal are sketchy, but I hear it pegs 3 Arts’ valuation at $300 million at the least, with some sources indicating it could be closer to $350 million. I hear the management/production company’s leadership would be staying put after the transaction. That includes 3 Arts partners Erwin Stoff, Michael Rotenberg, Howard Klein, David Miner, Dave Becky, Nick Frenkel and Molly Madden.

Lionsgate and 3 Arts had no comment.

Lionsgate had indicated that it was on the market for acquisitions, and had been looking at several management/production companies over the past several months as a way of getting closer to talent, sources said. Meanwhile, 3 Arts last year retained the independent investment bank Moelis & Co. to explore possible options, including a sale.

Founded in 1991 by Stoff, Klein and Rotenberg, 3 Arts has gradually became a comedy powerhouse with a strong client roster of A-listers and an expansive producing slate that includes such popular TV series as It’s Always Sunny In Philadelphia, Silicon ValleyBrooklyn Nine-Nine, Insecure, The Good Place, Unbreakable Kimmy Schmidt, Baskets, and The Mindy Project.

Access to top talent has been a major driver of recent interest in management companies, illustrated by Electus’ deal for Principato-Young. Additionally, the acquisition would supply Lionsgate with a steady revenue stream from 3 Arts’ ongoing series, with 3 Arts’ slate adding volume to the portfolio of the Lionsgate TV group overseen by Kevin Beggs.

Anita Busch and Mike Fleming Jr. contributed to this report.

Subscribe to Deadline Breaking News Alerts and keep your inbox happy