Sorainen, Valiunas Ellex, Klavins Ellex, and Cobalt have advised on Baltic elements of the acquisition by AMC Entertainment Holdings, Inc. of Nordic Cinema Group Holding AB from European private equity firm Bridgepoint and Swedish media group Bonnier Holding. The transaction — all-cash and valued at SEK 8.250 million (approximately USD 929 million) — is conditional upon antitrust clearance by the European Commission, which is expected in the first half of 2017.
Sorainen advised AMC, working alongside Pinsent Masons, Husch Blackwell, Weil, Gotshal & Manges, and Lindahlhas.
In addition to Valiunas Ellex, Klavins Ellex, and Cobalt, the sellers were advised by Mannheimer Swartling, White & Case, Dittmar & Indrenius, BA-HR, Gorrissen Federspiel, Roschier Attorneys, Hansen Law, and Michelmores.
Nordic operates 68 theaters and has a substantial minority interest (approximately a 50% ownership) in another 50 associated theaters to which Nordic provides a variety of shared services. According to Sorainen, "Nordic's theaters are number one in market share in Sweden, Finland, Estonia, Latvia, and Lithuania. Nordic currently is number two in market share in Norway, and with a new theater currently under construction in Norway and scheduled to open next year, is expected to increase market share in Norway to number one as well. Nordic also has theaters in Denmark."
Nordic was formed in May 2013 through a merger between SF Bio Group and the Finnkino Group. The owners at that time, Ratos and Bonnier, divested Nordic in 2015 to Bridgepoint, with Bonnier as continued co-owner. Before the sale, it was owned by Bridgepoint (68%), Bonnier (30%) and management. It has an annual turnover exceeding SEK 3 billion.
Nordic will maintain its Stockholm headquarters, but will operate as a subsidiary of London-based Odeon Cinemas Group, which AMC acquired in November of 2016. As of today, Odeon operates 243 theaters with 2,262 screens in the U.K., Ireland, Germany, Austria, Italy, Spain, and Portugal under the Odeon, Cinesa, UCI, and UCI Kinowelt brands. Odeon is already Europe's largest cinema operator, and when combined with Nordic, Odeon's scale and market position across Europe is expected to grow markedly, as AMC's European theatre operations will increase to 361 theaters and 2,926 screens.
According to an AMC press release, "including the associated theaters, the combination with Nordic will result in AMC’s hitting the never before reached milestones of 1,000 theaters and 11,000 screens in 15 countries. This will further strengthen AMC's current position of being the largest cinema operator in the United States, the largest cinema operator in Europe and the largest cinema operator in the world."
"For the third time in the past twelve months, we believe we have discovered a substantial acquisition that gives AMC yet another opportunity to further expand and diversify our geographic reach and more firmly establish AMC as the undisputed leader in movie exhibition worldwide," said AMC CEO and President Adam Aron. "It has been our observation that Nordic is extremely well-run with a modern up-to-date theatre circuit that in our opinion offers tremendous value potential for AMC over the foreseeable future. We are also excited by the growth potential of Nordic as it moves forward with 10 theaters already in development or re-development. We have been impressed with Nordic's talented leadership team, and further believe that their added expertise will be invaluable to us in helping to drive AMC's progress across Europe. AMC will bring additional efficiencies of scale and innovative strategic initiatives to the Nordic brands. At the same time, we will ensure that these theaters continue to be operated by locally-experienced theatre managers and country leadership teams who understand how to serve the communities and countries where they live and work."
"AMC is the world's leading movie exhibitor and we are proud to have caught their interest. They will be a perfect owner for Nordic. They share our long and successful history and our commitment to creating best-in-class movie experiences. AMC will bring valuable resources and expertise that will enable us to continue to innovate, grow and provide our customers with even greater movie experiences," said Jan Bernhardsson, President and CEO of Nordic Cinema Group.
Advising the Buyers
The Sorainen team acting as AMC’s legal advisor in the Baltics was led by Partner Toomas Prangli, supported by Senior Associates Piret Lappert, Jonas Kiauleikis, and Janis Bite.
The Pinsent Masons team was led by Private Equity Partner Tom Leman and included John Tyerman, James Kaye and Ben Elliott.
Advising the Sellers
White & Case and Mannheimer Swartling served as lead counsel to the sellers, along with Cobalt (in Estonia), Valiunas Ellex (in Lithuania), and Klavins Ellex (in Latvia) in the Baltics, as well as Roschier Attorneys, Hansen Law, and Michelmores.
Cobalt's Estonian team was led by Partner Marina Tolmatshova, supported by Senior Associates Heleri Tammiste and Triin Ploomipuu.
The Klavins Ellex team in Latvia was led by Senior Attorney Maris Brizgo and included Senior Attorneys Irina Kostina, Martins Gailis and Associates Inese Freivalde, Henrijs Niedra, and Krista Zarina. The Valiunas Ellex team in Lithuania was led by Senior Associate Ruta Besusparyte and included Senior Associates Giedre Adomaviciute and Dovile Skesteniene, and Associate Justas Cesnavicius.
The White & Case team was led by Partner Ian Bagshaw (London) and included Partners Jarlath McGurran (London), Pontus Lindfelt (Brussels) and Johan Steen (Stockholm), Counsel Peter Lewis (London), and Associates Kasit Rochanakorn, Glordiola Duli (both London), Matteo Giangaspero (Brussels), David Nisbet, and Oliver Clarke (both London).