Cinema chain Cineworld has bought independent movie theatre operator Picturehouse, giving traditionally mainstream Cineworld access to an art house film audience.
Cineworld, which runs about 80 cinemas in the UK, is issuing new shares to help finance the cash deal, which values privately-owned Picturehouse at £47.3m.
The transaction will enable Picturehouse - the trading name of City Screen Group - to open in more than 10 new locations, adding to the 21 sites it currently operates.
“We recognise that Picturehouse is valued by its customers and we look forward to supporting the business through the next phase of its development,” said Stephen Wiener, chief executive of Cineworld.
Picturehouse founder and director Lyn Goleby pre-empted any concerns that the buyout could detract from the company’s distinctive charm in a market dominated by identikit multiplexes.
“The unique character of Picturehouse cinemas will remain and our team will continue to bring the widest range of film to customers,” she said.
Picturehouse will operate as a separate entity within the Cineworld Group and continue to be run by the existing Picturehouse management team.
Cineworld, which is looking to big-name releases like ‘The Hobbit’ and James Bond movie ‘Skyfall’ to keep its box office revenues flowing over Christmas, said trading had been in line with market expectations.
It said Picturehouse expected to earn £5m in 2012 and that the buy would likely boost Cineworld earnings per share by high single digits in 2013.
The company said it intended to place up to 6.4 million shares, representing around 4.5 per cent of the company, to raise £16m. The rest of the buy would be funded from debt.