Imax intends to acquire full ownership of IMAX China subsidiary

Imax has filed a proposal to acquire the outstanding 96.3 million shares in IMAX China, a Hong Kong-listed subsidiary established by Imax to oversee its business in Greater China, for approximately HK$10 per share in cash, or $124M. The offer represents an approximate 49% premium to the the 30-trading day average closing price. Upon approval of the offer and the scheme of arrangement, Imax will own 100% of Imax China. The transaction is expected to be accretive to Imax immediately following completion; for instance, Imax Q1 Adjusted EBITDA would have been $5M, or 18%, higher including the Imax China minority interest. The transaction could also unlock approximately $2M of annual public company cost savings as well as potential tax efficiencies. The first commercial Imax location opened in China in 2007 and Imax China was established as a subsidiary in 2011. There are more than 770 Imax commercial locations in Greater China – the most of any market in the world. Upon completion, Daniel Manwaring will continue as Imax China CEO, reporting to Gelfond and overseeing all local business functions. Imax China will remain headquartered in Shanghai with offices in Beijing. The acquisition of Imax China is subject to customary closing conditions, including the receipt of Imax China shareholder and other approvals, and is expected to close later this year.