AMC Entertainment Goes Public Tomorrow At $18 A Share

The No. 2 exhibition chain will trade on the NYSE under the symbol “AMC.” It will use the proceeds from the $331M offering to pay down some of its  high-interest debt and for the catch-all “general corporate purposes.” The offering will leave China’s Wanda Group, which paid more than $2.6B for AMC last year, firmly in control of the theater company. It is selling 18,421,053 shares of its Class A stock that entitles owners to one vote per share, and will keep the Class B stock with three votes per share. Class A owners just have 7.8% of the votes while Class B holders have 92.2%. The stock price values AMC Entertainment at about 6.8 times its estimated cash flow for 2014, a bit lower than rivals Regal Entertainment and Cinemark at about 7.5 times cash flow, MKM Partners’ Eric Handler says. AMC has a lot of debt and its theaters, concentrated in major cities, pay high rent. Handler estimates that AMC pays about $90,000 per screen for rent vs. $58,000 for Regal and $55,000 for Cinemark. But exhibition stocks have been hot: Regal shares are +37.7% in 2013, Cinemark is +25.3%, and Carmike is +65.9%. AMC’s expected to end this year generating $103.3M in net income from continuing operations on revenues of $2.78B.

Related: AMC Entertainment Gives Customers A Shot At IPO Shares

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