Kinepolis Enters US Market with Purchase of Michigan Cinema Operator
The deal has an enterprise value of $152.25 million. The acquisition, which is expected to close in October, includes a substantial corporation tax value of more than $13 million.
BLOOMFIELD HILLS, MI—Kinepolis, a Moutstraat, Belgium-based cinema company, will expand its global presence into the United States with the acquisition of MJR Digital Cinemas, which is headquartered here.
The deal has an enterprise value of $152.25 million. The acquisition, which is expected to close in October, includes a substantial corporation tax value of more than $13 million.
Kinepolis, which operates 44 cinemas in Canada since its acquisition of the Canadian movie theatre group Landmark Cinemas in December 2017, has reached an agreement to purchase privately-held MJR Digital, which operates 10 movie theater complexes with a total of 164 screens and a seating capacity of more than 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.
Seven locations are owned (114 screens), including three on a leasehold site, the remaining three are rented complexes (50 screens). The chain has three megaplexes with 20 screens each, five with 16 screens, one with 14 screens and one with 10 screens. All screens have 5.1 digital surround sound and two complexes feature an “EPIC experience” auditorium combining 4K projection with Dolby Atmos sound. Nearly all movie theaters are equipped with recliner seats.
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, the company states.
“I’m very proud we have the opportunity to expand our investment in Canada to the US. The successful acquisition of Landmark Cinemas Canada shows we can successfully implement our corporate strategy in another continent and another time zone,” says Eddy Duquenne, CEO of Kinepolis Group. “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.”
Mike Mihalich, founder and CEO of MJR Digital Cinemas, says, “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.”
In Europe, Kinepolis Group NV has 53 cinemas spread across Belgium, the Netherlands, France, Spain, Luxembourg, Switzerland and Poland.
In total, Kinepolis Group employs 3,800 people and currently operates 97 cinemas (45 of which it owns) worldwide, with a total of 884 screens and more than 175,000 seats.