Total screens will increase to nearly 1,100; Expands circuit into new
markets
MILWAUKEE--(BUSINESS WIRE)--Nov. 2, 2018--
Marcus Theatres®, a division of The Marcus Corporation (NYSE:
MCS), today announced it has signed an agreement to acquire the assets
of Movie Tavern from VSS-Southern Theatres, LLC (“Southern Theatres”), a
portfolio company of Veronis Suhler Stevenson (“VSS”), a private equity
firm. Based upon yesterday’s closing share price of The Marcus
Corporation’s common stock, the purchase price is currently valued at
approximately $126 million, comprised of $30 million in cash and
2,450,000 shares of The Marcus Corporation common stock, subject to
certain lock-up restrictions.
With 22 locations and 208 screens in nine states, New Orleans-based
Movie Tavern is an industry leader known for its successful in-theatre
dining concept featuring chef-driven menus, premium quality food and
drink and luxury seating. Upon completion of the transaction, Marcus
Theatres will own or operate a total of 1,098 screens at 90 locations in
17 states, representing a 23% increase in Marcus Theatres’ total screen
count.
“The acquisition of Movie Tavern is another significant milestone in the
growth trajectory of Marcus Theatres,” said Gregory S. Marcus, president
and chief executive officer of The Marcus Corporation. “Selective,
disciplined acquisitions such as this create a compelling opportunity to
expand into new growth markets and leverage our proven success. We
anticipate this acquisition will be accretive to earnings, earnings per
share and cash flow in the first twelve months following the closing of
the transaction, and expect a smooth integration of Movie Tavern into
our circuit. In addition, by using common stock as a component of the
consideration, we will continue to maintain an extremely strong balance
sheet and be in a position to consider additional growth opportunities
in the future.”
The transaction is expected to be completed early in the first quarter
of 2019, subject to Hart-Scott-Rodino Act clearance and other customary
closing conditions, consents and approvals.
“The foundation of our growth and success is our guest service expertise
and the strength of our food and beverage offerings, which includes
multiple lobby and in-theatre dining options that have revolutionized
the moviegoing experience,” said Rolando B. Rodriguez, chairman,
president and chief executive officer of Marcus Theatres. “Building upon
this successful platform, we look forward to collaborating with our new
colleagues to further enhance the Movie Tavern experience. This includes
leveraging our ‘to the seat’ delivery of food and beverages, as well as
the introduction of new amenities to select locations, such as premium
large format screens and DreamLoungerSM recliner
seating; signature programming, such as $5 movies on Tuesdays with free
popcorn for loyalty members; and proven marketing, loyalty and pricing
programs that will benefit Movie Tavern guests.”
The first Movie Tavern location opened in 2001 in Fort Worth, Texas, and
Movie Tavern has become one of the largest and fastest growing
in-theatre dining concepts in the United States. Owned by Southern
Theatres since 2013, Movie Tavern has expanded to nine states -
Arkansas, Colorado, Georgia, Kentucky, Louisiana, New York,
Pennsylvania, Texas and Virginia. Marcus Theatres will retain the Movie
Tavern brand name given its strength and appeal.
“Now is an exciting time for our Movie Tavern colleagues and guests as
they become part of the Marcus Theatres family,” said John P. Caparella,
chief executive officer of Southern Theatres. “As we have demonstrated
over the years, there is a tremendous appetite for well-executed
in-theatre dining. By being part of the Marcus Theatres team, Movie
Tavern will be even better positioned to enhance the guest experience.”
“Marcus Theatres has set a high bar for exceptional theatre ownership
and management and possess the capital and expertise to elevate the
Movie Tavern concept to even higher levels,” said Trent Hickman,
managing director of VSS. “We have enjoyed partnering with the Movie
Tavern team, and remain invested in their success.”
J.P. Morgan is serving as financial advisor and Foley & Lardner LLP is
serving as legal counsel to The Marcus Corporation. PJ SOLOMON is
serving as financial advisor and Ropes & Gray LLP is serving as legal
counsel to Southern Theatres.
Conference Call and Webcast
Marcus Corporation management will hold a conference call today, Friday,
November 2, 2018, at 10:30 a.m. Central/11:30 a.m. Eastern time to
discuss the Movie Tavern acquisition. Interested parties may listen to
the call live on the internet through the investor relations section of
the company's website: www.marcuscorp.com,
or by dialing 1-574-990-3059 and entering the passcode 9596297.
Presentation materials can be accessed in the Investors section of the
company’s website on the “News and Events” page under
“Presentations/Documents” and are included in the webcast link.
Listeners should dial in to the call at least 5-10 minutes prior to the
start of the call or should go to the website at least 15 minutes prior
to the call to download and install any necessary audio software.
A telephone replay of the conference call will be available through
Friday, November 9, 2018, by dialing 1-855-859-2056 and entering
passcode 9596297. The webcast and presentation materials will be
archived on the company’s website for one year.
About Marcus Theatres
Marcus
Theatres®, a division of The
Marcus Corporation, is the fourth largest theatre circuit in the
United States and currently owns or operates 890 screens at 68 locations
in Wisconsin, Illinois, Iowa, Minnesota, Missouri, Nebraska, North
Dakota and Ohio. Upon completion of the Movie Tavern transaction, Marcus
Theatres will own or operate a total of 1,098 screens at 90 locations in
17 states. For more information, please visit www.marcustheatres.com
and follow the company on Facebook
and Twitter
(@Marcus_Theatres).
About The Marcus Corporation
Headquartered in Milwaukee, The
Marcus Corporation is a leader in the lodging and entertainment
industries, with significant company-owned real estate assets. In
addition to its Marcus Theatres division, its lodging division, Marcus®
Hotels & Resorts, owns and/or manages 21 hotels, resorts and
other properties in nine states. For more information, please visit the
company’s website at www.marcuscorp.com.
About Movie Tavern
Founded in 2001, Movie
Tavern is a leader in the cinema eatery segment catering to adults
and families. In September 2013, Movie Tavern was acquired by New
Orleans based VSS-Southern Theatres, LLC (“Southern Theatres”).
About VSS-Southern Theatres, LLC
VSS-Southern Theatres, LLC (“Southern Theatres”) was formed in May of
2003 by George Solomon. In April 2005, Veronis Suhler Stevenson (“VSS”)
made the first of several equity investments in Southern Theatres.
Southern Theatres is the sixth largest theatre circuit in The United
States and is currently responsible for the daily operations of The
Grand Theatres, Amstar Cinemas and Movie Tavern. After the Movie Tavern
divestiture to The Marcus Corporation, Southern Theatres will continue
to operate its 18 traditional Grand Theatres and Amstar locations with
266 digital screens across the Southeastern United States.
About Veronis Suhler Stevenson (VSS)
Veronis
Suhler Stevenson (VSS) is a private investment firm that invests in
the information, education, healthcare, and tech-enabled business
services industries. VSS provides capital for growth financings,
recapitalizations, strategic acquisitions, and buyouts to lower middle
market companies and management teams with the goal of building
companies organically as well as through a focused add-on acquisition
program. VSS makes privately-negotiated investments across the capital
structure and invests in situations requiring control or non-control
equity, mezzanine securities, and structured equity securities.
Certain matters discussed in this press release are “forward-looking
statements” intended to qualify for the safe harbors from liability
established by the Private Securities Litigation Reform Act of 1995,
including the expectation that the Movie Tavern acquisition will be
accretive to earnings, earnings per share and cash flow in the first
twelve months following the closing of the transaction. These
forward-looking statements may generally be identified as such because
the context of such statements include words such as we “believe,”
“anticipate,” “expect” or words of similar import. Similarly, statements
that describe our future plans, objectives or goals are also
forward-looking statements. Such forward-looking statements are subject
to certain risks and uncertainties which may cause results to differ
materially from those expected, including, but not limited to, the
following: (1) the availability, in terms of both quantity and audience
appeal, of motion pictures for our theatre division, as well as other
industry dynamics such as the maintenance of a suitable window between
the date such motion pictures are released in theatres and the date they
are released to other distribution channels; (2) the effects of adverse
economic conditions in our markets, particularly with respect to our
hotels and resorts division; (3) the effects on our occupancy and room
rates of the relative industry supply of available rooms at comparable
lodging facilities in our markets; (4) the effects of competitive
conditions in our markets; (5) our ability to achieve expected benefits
and performance from our strategic initiatives and acquisitions; (6) the
effects of increasing depreciation expenses, reduced operating profits
during major property renovations, impairment losses, and preopening and
start-up costs due to the capital intensive nature of our businesses;
(7) the effects of weather conditions, particularly during the winter in
the Midwest and in our other markets; (8) our ability to identify
properties to acquire, develop and/or manage and the continuing
availability of funds for such development; (9) the adverse impact on
business and consumer spending on travel, leisure and entertainment
resulting from terrorist attacks in the United States or other incidents
of violence in public venues such as hotels and movie theatres;(10) a
disruption in our business and reputational and economic risks
associated with civil securities claims brought by shareholders; and
(11) our ability to timely and successfully integrate the Movie Tavern
operations into our own circuit. Shareholders, potential investors and
other readers are urged to consider these factors carefully in
evaluating the forward-looking statements and are cautioned not to place
undue reliance on such forward-looking statements. The forward-looking
statements made herein are made only as of the date of this press
release and we undertake no obligation to publicly update such
forward-looking statements to reflect subsequent events or circumstances.
View source version on businesswire.com: https://www.businesswire.com/news/home/20181102005143/en/
Source: The Marcus Corporation
Investors:
Douglas A. Neis, The Marcus Corporation, (414) 905-1100
or
Media:
Mari
Randa, Marcus Theatres, (414) 905-1237
or
Tanya Dessereau,
VSS, (212) 381-8556
