AMC Networks Buys RLJ Entertainment

AMC Networks has officially reached a deal to acquire RLJ Entertainment, a transaction valued at $274 million.

AMC Networks will pay, in cash, an aggregate of approximately $65 million to holders of RLJ Entertainment’s outstanding common stock, preferred stock and warrants not currently owned by AMC Networks, Robert L. Johnson and their respective affiliates. RLJ Entertainment will become an indirect subsidiary of AMC Networks, with Johnson and his affiliates owning a 17 percent stake.

RLJ Entertainment encompasses the OTT branded channels Acorn TV, known for its British and international content, and UMC (Urban Movie Channel), an SVOD service created for African American and urban audiences. RLJ Entertainment also has a controlling interest in Agatha Christie Limited, providing the company with IP licensing opportunities.

Josh Sapan, president and CEO of AMC Networks, said, “Bob Johnson is a legend for good reasons that we are the beneficiaries of. His management team is extraordinary, having successfully transitioned Acorn TV from a home video and DVD business to a leading direct-to-consumer subscription service, and growing both Acorn TV and UMC in a competitive environment, by offering excellent, sought-after content and creating strong brands. In addition, RLJ Entertainment’s majority stake in the Agatha Christie library—a content brand which remains one of the most popular and venerable—provides AMC Networks with valuable IP opportunities.”

Sapan added: “This acquisition furthers AMC Networks’ digital strategy by meaningfully accelerating our interests in direct-to-consumer ad-free subscription services that we own and control, in addition to providing us with access to strong IP as we continue to diversify our revenue opportunities, placing AMC Networks in a stronger position over the long term.”

Scott R. Royster, RLJ Entertainment’s lead independent director and a member of RLJ Entertainment’s special committee of the board established to evaluate, negotiate and determine whether to approve AMC’s going-private proposal, commented: “Our mission during the transaction process was to carefully evaluate AMC’s proposal and negotiate the best price and overall deal terms attainable for the company’s non-affiliate common stockholders. The going-private transaction with AMC provides stockholders with immediate liquidity, and the merger price represents a substantial premium to the company’s unaffected stock price.”

Johnson, RLJ Entertainment’s founder and chairman, said, “I fully support AMC Networks’ acquisition of RLJ Entertainment. I commend the special committee for negotiating the transaction for our public stockholders.”