Last updated on July 3rd, 2019 at 07:21 pm
Marcus Theatres is a division of The Marcus Corp. It’s the fourth-largest theater company in the U.S., with 890 screens at 68 locations in Wisconsin, Illinois, Iowa, Minnesota, Missouri, Nebraska, North Dakota and Ohio.
VSS-Southern is a portfolio company of private equity firm Veronis Suhler Stevenson. It acquired Movie Tavern in 2013. Founded in 2001 in Fort Worth, Texas, Movie Tavern specializes in cinema eateries with chef-driven menus and luxury seating. It has 208 screens at 22 locations in Arkansas, Colorado, Georgia, Kentucky, Louisiana, New York, Pennsylvania, Texas and Virginia.
Marcus plans to retain the Movie Tavern brand on its theaters. With the acquisition, Marcus would expand its geographic reach and up its theater count by 23 percent, bringing its total to 1,098 screens at 90 locations in 17 states.
The transaction is slated to be comprised of $30 million in cash and 2.45 million shares of The Marcus Corp. common stock. It is expected to close in the first quarter of 2019.
While Marcus Theatres owns about 80 percent of its theater real estate, Movie Tavern leases all 22 of its theaters, said Douglas Neis, chief financial officer of The Marcus Corp. In a call with analysts, he said Marcus considers the transaction to include cash, stock and lease debt.
Gregory Marcus, president and chief executive officer of The Marcus Corp., pointed out this transaction is being announced almost two years to the day from the close of Marcus’ acquisition of St. Louis-based theater company Wehrenberg Theatres. The company had indicated then its intention to pursue additional acquisitions in the theater space.
“The acquisition of Movie Tavern is another significant milestone in the growth trajectory of Marcus Theatres,” Marcus said. “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 12 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.”
“Now is an exciting time for our Movie Tavern colleagues and guests as they become part of the Marcus Theatres family,” said John 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.”