The owners of Pinewood Studios are looking for a higher return on their investment by putting the television and film studios company up for sale, according to the company’s website, the Wall Street Journal and other media sources.
The company — whose newest production center, Pinewood Studios Atlanta, is located in west Fayetteville — is putting itself on the sales block in a strong financial position and could bring a sales price of $500 million, according to analysts’ reports.
The owners are seeking outside funding to continue to expand the business, according to business media reports. Around 80 percent of the company is owned by three shareholders.
The company’s current market capitalization is estimated at around $440 million US after an 18 percent rise in its share price on news of its potential sale.
Pinewood had a fiscal first half-year operating profit of £7 million (about $10.2 million US), up from £2.5 million (about $3.6 million US)a year earlier, according to the Wall Street Journal.
The local operation and its state of the art production facilities have become the unofficial headquarters for new Marvel productions, with several future Marvel films already scheduled to be produced here.
“The news comes as Pinewood has enjoyed strong revenues for its production facilities, thanks to the likes of “Star Wars: The Force Awakens” and “Spectre” [the new James Bond movie]. The company has, however, long sought to leverage its bricks and mortar infrastructure to get more control of IP and upside in the actual content produced in its facilities,” according to an entertainment business website, Deadline.com.
The Fayette studios site began construction in July 2013. With 11 sound stages so far, the site has hosted the making of the Marvel blockbusters “Ant-Man” and the Captain America series.
Business is good, according to a news release on the Pinewood Studios website posted Feb. 10:
“Since the publication of the Interim Results on 1 December 2015, film revenues have benefited from a robust growth in ancillary sales whilst also continuing to operate at high stage utilisation levels.
“Television revenues have performed well in the second half of this financial year.
“Media Hub revenues have also performed strongly as a result of high occupancy.
“The company has continued to develop its international revenues, with strong growth from its joint venture in Atlanta, Georgia.
“Media Investment revenues, as anticipated, have grown in the second half of this financial year.”
The answer to “Why sell now?” is in the next sentence of the news release: “Accordingly, management’s current expectations of performance for the financial year ending 31 March 2016 are now higher than at the time of the interim results last December.” In other words, the owners want more value from their shares in the group.
From the company’s news release: “The board believes that the company, as the world leading studio and production services operator, has significant future growth potential.
“The objectives of last year’s share placing, which was successfully completed on 17 April 2015, were to raise proceeds of £30m [a little over $43 million] to part fund phase one of the … development [plan] and also to create a more diversified shareholder base that would be able to support the company through subsequent phases of growth and enable the company to move up to a full listing on the main market.
“The shareholder register, however, remains tightly held, which has continued to stifle liquidity in the shares and has prevented the company from achieving its aim of obtaining a main market listing.
“The board has now determined that it is appropriate to evaluate alternative opportunities to maximise value for the company’s shareholders and to build on Pinewood’s successes to date. We believe there is a requirement for a funding strategy to be in place to fully realise the company’s future potential (for instance to fund [development plan] phases two and three). Accordingly, Rothschild [investment bank] has been appointed to assist with a strategic review of the overall capital base and structure, which could include a sale of the company.
The studios’ outlook is good, said CEO Ivan Dunleavy:
“As we come close to the end of the financial year, the benefits of our long-term strategy for the business are again being realised. The company continues to experience strong demand for its facilities and services as we look forward to the new financial year.”
