Bloomfield Hills-based MJR Digital Cinemas is being sold to Kinepolis Group NV in a deal valued at $152 million, giving the European cinema company entry into the U.S. market.
The acquisition of MJR, which is subject to U.S. antitrust clearance and other customary closing conditions, fits into Kinepolis’ expansion strategy and allows the company to expand its investment in the North American market only 18 months after the acquisition of Landmark Cinemas in Canada. Kinepolis expects to complete the transaction before the end of October 2019.
MJR Digital Cinemas is privately held and operates 10 movie theater complexes with a total of 164 screens and a seating capacity of over 20,000, all located in Michigan. All movie theaters are multi- and megaplexes with a capacity varying from 10 to 20 screens. In 2018, the 10 movie theaters drew 6.2 million visitors with total revenue of $81.2 million.
“The successful acquisition of Landmark Cinemas Canada shows we can successfully implement our corporate strategy in another continent and another time zone,” Kinepolis Group CEO Eddy Duquenne said in a statement. “The acquisition of MJR fits perfectly into our expansion strategy: geographically, it adjoins Canada; the movie theaters are all multi- or megaplexes, and we also acquire an important real estate position. I'm particularly enthusiastic about the eagerness of the current MJR team to implement Kinepolis’ management vision and customer concepts at the MJR cinemas.”
MJR Digital Cinemas Founder and CEO Mike Mihalich added: “I was very fortunate to build MJR from the ground up into the tremendous theatre circuit it is today. I am delighted my outstanding supporting cast will continue as part of the larger Kinepolis team to serve our customers with the same high standards my team established and maintained since MJR’s founding in 1999. I am comforted such a high-quality operator with shared values will steward MJR into the future.”
MJR’s annualized and adjusted EBITDA stands at approximately $18 million. MJR’s revenue in 2018 amounted to $81.2 million with 59.1% from box office sales, 37.6% from in-theater sales (ITS), 3% from screen advertising and 0.3% coming from other revenue.
The acquisition includes a corporation tax value of over $13 million.
New York-based PJ Solomon is serving as financial adviser and Honigman LLP as legal counsel to MJR Digital Cinemas. Kinepolis will continue to operate MJR under the existing brand name. The movie theater chain, which employs 815 people, will continue to be managed by the current management, which, for the integration, will be supported by the European Kinepolis team and by the Canadian Landmark team.