National Amusements, the controlling shareholder of Paramount Global run by Shari Redstone, has received a $125 million preferred equity investment from BDT Capital Partners.
BDT is an affiliate of BDT & MSD Partners, a merchant bank catering to family business owners and founders. Its infusion will help the company, which brought together CBS and Viacom in 2019 before later rebranding as Paramount, weather a difficult stock market environment. Shares in Paramount are worth less than half what they were at the time of the merger, though they rose 5% in after-market trading on the news of the BDT stake.
Wall Street has looked skeptically at Paramount’s spending on streaming in recent months amid a broader rethink of the media sector’s approach to the direct-to-consumer business.
A press release about the investment said it will “position NAI for sustainable growth and further post-pandemic recovery in its underlying operations as movie theatre attendance continues to increase.” Specific goals include reducing interest expense and paying down a revolving loan and recent term loans. After those facilities are retired, NAI shares in Paramount Global pledged to support those loans will be released back to NAI, and obligations to make future pledges under these facilities will be eliminated.
“Our expanded partnership with BDT & MSD reflects our strong belief in Paramount’s ability to deliver value to all shareholders,” said Redstone. “NAI has conviction in Paramount’s strategy and execution, and we remain committed to supporting Paramount as it takes the necessary steps to build on its success and capitalize on the strategic opportunities in our industry.”
Redstone is non-executive chair of Paramount and president, CEO and chair of NAI.
“We are pleased to partner with National Amusements in a transaction that supports its stewardship of Paramount Global,” said Byron Trott, Chairman and Co-CEO of BDT & MSD Partners. “Paramount has an incredible legacy, underpinned by its industry-leading content and media assets. We believe strongly in the value creation opportunities ahead for the company and its shareholders.”
The investment is expected to close next week, subject to customary closing conditions.
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