Sony deal for Alamo Drafthouse boosts cinema names

Cinema names moved higher on Thursday morning after Sony Pictures Entertainment, a unit of Sony (SONY), confirmed that it has acquired the eclectic dine-in theater chain Alamo Drafthouse Cinema, an unusual example of a studio owner buying a theater chain.

Sony Pictures Entertainment and Alamo Drafthouse Cinema on Wednesday announced that SPE acquired Alamo Drafthouse Cinema, a theatrical exhibitor. The company will be managed within SPE under a newly established division, Sony Pictures Experiences, the companies said, with SPE saying that the deal reinforces SPE’s long-held commitment to theatrical exhibition and continued initiatives in experiential entertainment. Alamo Drafthouse’s Michael Kustermann will remain CEO of the pioneering dine-in movie theater chain and head Sony Pictures Experiences, reporting to Ravi Ahuja, President and COO of SPE, and Alamo Drafthouse will continue to operate all 35 of its cinemas across 25 metro areas under the Alamo Drafthouse brand. In addition, Alamo Drafthouse-owned Fantastic Fest, the world-renowned genre film festival, is included in the acquisition and will also continue to be operated by Alamo Drafthouse. The company’s headquarters will remain in Austin, Texas.

“We believe strongly in engaging entertainment fans outside the home in fun and distinctive ways as seen most recently with our Wheel of Fortune LIVE! traveling tour, and the opening of Wonderverse in Chicago,” said Ahuja.  “Alamo Drafthouse’s differentiated movie-going experience, admired brand and devoted community fit well with this vision.  Our Crunchyroll business also aligns well with their audience’s interests. We look forward to building upon the innovations that have made Alamo Drafthouse successful and will, of course, continue to welcome content from all studios and distributors.”

SPE acquired Alamo Drafthouse from owners Altamont Capital Partners, Fortress Investment Group and founder Tim League. Goldman Sachs acted as exclusive financial advisor to Alamo Drafthouse in the transaction.

In morning trading, shares of AMC Entertainment (AMC) are up 8% to $5.31, while Cinemark Holdings (CNK) are up 2% to $18.15.