Regal Entertainment Buying Hollywood Theaters
America's largest cinema chain, Regal Entertainment Group , announced Tuesday that it has entered into an agreement to purchase smaller operator Hollywood Theaters for a purchase price of $191 million cash, plus assumption of $47 million worth of lease obligations; $157 million of the cash portion of the purchase price will be used to repay debt owed to Hollywood's lenders.
Hollywood Theaters brings with it 43 theaters with 513 screens, which will increase Regal's total theater count to 583, and its screen count to 7,393.
The company also noted that its purchase price amounts to approximately 5.9 times Hollywood's annual cash flow. By way of comparison, Regal's own shares sell for approximately 7.8 times its $314 million in cash flow from the past four reported quarters, suggesting Regal is acquiring its rival for a considerable discount.
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