Saban Capital Acquisition is acquiring Panavision and Sim Video International Inc. in a $622 million cash and stock deal that would combine the companies to create a comprehensive production and post-production entity.
The three companies, to be united under the Panavision Holdings banner, are positioned to capitalize on the surge in content spending that’s been fueled by the rise of online streaming services.
According to documents filed this morning with the SEC, Saban Capital Acquisition will pay Panavision shareholders $368 million in cash and 8.1 million shares of Saban stock. Another 6 million shares vest over time, and are subject to certain conditions. Sim’s investors will receive $110 million in cash and 3.1 million shares of Saban stock.
Saban Capital Acquisition, which is a special purpose acquisition company affiliated with Haim Saban’s Los Angeles-based investment firm, intends to finance the acquisitions through funds held in a Cayman Islands trust and $350 million in loans (not all of which will be used to close the transaction). Saban also envisions raising $55 million through private placement of common stock at $10 a share.
“Advancements in technology and the emergence of streaming have fundamentally changed how consumers watch and discover content. This is driving significant growth in the market for production and post-production services,” Saban, chairman of Saban Capital Acquisition, said in a statement. “This secular trend creates a tremendous opportunity for Panavision to leverage its leading technology and pursue opportunistic acquisitions to grow in a manner that is agnostic to the content creator and distribution channel.”
Woodland Hills-based Panavision built its reputation as a maker of high-precision cameras and lenses, and a provider of production equipment and services. Headquartered in Toronto, Sim is a provider of production and post-production solutions with facilities in Los Angeles, Vancouver, Atlanta and New York.
Saban Capital CEO Adam Chesnoff said bringing these companies together will create a more comprehensive offering for the entertainment industry.
“Combining this platform with Saban’s wide-ranging global media relationships, experience in production, and successful track record of creating value for its partners, will position the Company to accelerate growth and pursue complementary acquisitions,” Cesnoff said.
Upon the closing of the proposed transaction, Panavision Chief Executive Officer Kim Snyder will serve as chairman and chief executive officer. Panavision Chief Financial Officer Bill Roberts will serve in that role for the combined company.
“For nearly 65 years, Panavision has proudly served the entertainment industry providing cutting-edge equipment and exemplary service to support the creative vision of our customers,” said Snyder. “This acquisition will leverage the best of Panavision’s and Sim’s resources by providing comprehensive products and services to best address the ever-adapting needs of content creators globally.”
The respective boards of directors of Saban Capital Acquisition Corp., Panavision and Sim have unanimously approved the proposed transactions. Completion of the proposed transactions are subject to Saban Capital Acquisition Corp. stockholder and regulatory approval,
The parties expect that the merger will be completed in the first quarter of 2019.