Lionsgate to Buy Summit Entertainment in $700 Million Deal
Those smoldering vampires don't come cheap. Deadline Hollywood reported yesterday that Lionsgate is close to sealing the deal on a $700 million purchase of Summit Entertainment. This officially means that the once prime demographic of 18- to 34-year-old men now takes a backseat to hormone-ravaged teenage girls and under-sexed soccer moms.
The details of the deal has Lionsgate (known among genre fans as the house that Saw built) giving $400 million in equity and assuming a $300 million loan from JP Morgan to purchase Summit Entertainment (which insiders value at about $350 to $450 million). Of course Summit Entertainment is best known for the Twilight franchise, which has earned enough money to purchase its own country (tentatively named Cullenland). The move would give Lionsgate some cash to hedge against the release of The Hunger Games this year. With $590 million in debt and a 2011 which saw box office tallies coming in 64 percent down from the year before, Lionsgate needs a win. Big time.
Summit Entertainment had recently hired an investment firm to help with expansion, but it now appears that heads of the company Patrick Wachsberger and Rob Friedman will be moving on. The pair claim to be ready to "…work within the Lionsgate structure," but insiders feel the bad blood from the negotiations with Lionsgate will have the pair heading for ze hills within a month.
With just one Twilight film remaining, one has to wonder what is the true value of Summit Entertainment? Is Lionsgate overextendinghere? Time will tell.
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