Screaming Eagle Acquisition to merge with Studio Business of Lionsgate

Screaming Eagle Acquisition Corp. (SCRM) announced that it has entered into a definitive agreement to combine with the Studio Business of Lionsgate (LGF.A, LGF.B), which comprises its Television Studio and Motion Picture Group segments and one of the world’s most valuable film and television libraries, to launch Lionsgate Studios Corp. As a result of the transaction, 87.3% of the total shares of Lionsgate Studios are expected to continue to be held by Lionsgate, while Screaming Eagle public shareholders and founders and common equity financing investors are expected to own an aggregate of approximately 12.7% of the combined company. The transaction values Lionsgate Studios at an enterprise value of approximately $4.6B. Lionsgate Studios does not include the STARZ platform, which will continue to be wholly owned by Lionsgate. In addition to establishing Lionsgate Studios as a standalone publicly-traded entity, the transaction is expected to deliver approximately $350M of gross proceeds to Lionsgate, including $175M in PIPE financing already committed by leading mutual funds and other investors. Net proceeds from the transaction are expected to be used to enhance Lionsgate’s balance sheet and facilitate strategic initiatives, including those related to the eOne business, which acquisition is scheduled to close by calendar year end. Common shares of Lionsgate Studios will trade separately from Lionsgate’s Class A (LGF.A) and Class B (LGF.B) common shares as a single class of stock. The transaction is subject to certain closing conditions, including regulatory approvals and approval from the shareholders and public warrant holders of Screaming Eagle, and is expected to close in the spring of 2024.