Acquisition of Palace Cinemas’ chain in CEE boosts Cinema City’s market position

Cinema City International acquired 100% of the equity of four companies from the Palace Cinemas’ chain in Hungary, Czech Republic and Slovakia. The operations of the sold entities add up to 15 multiplexes with 141 screens. The acquisition makes Cinema City the third largest cinema operator in Europe with 90 multiplexes, 866 screens and extends its geographical coverage to seven courtiers with the inclusion of Slovakia.

Purchase price totaled EUR 28 million and represented a multiple of six times the normalized EBITDA of the four companies for 2010. Normalized EBITDA represents the EBITDA of the existing multiplexes and the annualized EBITDA of the operations, which started in 2010. At the closing, Cinema City assumed EUR 6.6 million in existing debt of the four companies and paid EUR 21.4 million in cash.

Subject of the deal became Palace Cinemas Czech s.r.o., Palace Cinemas Hungary Kft, Palace Cinemas Slovak Republic s.r.o. and Palace Multikino s.r.o.

The deal did not include Palace Mozi, Kft in Hungary, which operates 8 multiplexes. Palace Cinemas is controlled by Argus Capital, a CEE private equity fund.

Palace Cinemas (www.palacecinemas.net)
Palace Cinemas is the leading cinema operator in Czech Republic, Slovakia and Hungary. It operates 23sites with 185 screens.
The company was founded with the financial support of Argus Capital Partners L.P.

Cinema City International (www.cinemacity.nl)
Cinema City International is the largest multiplex cinema operator in Central and Eastern Europe and in Israel. It operates 866 screens in 90 multiplexes in Poland, Czech Republic, Hungary, Romania, Bulgaria, Slovakia and Israel. Another 35 multiplexes with 360 screens are under development. Cinema City employs over 4,000 people.

Argus Capital (www.arguscapitalgroup.com)
ARGUS was established in 1998 and was one of the first private equity companies to focus on the CEE region. With total commitments in excess of EUR€400 million in its two funds, ARGUS has invested in sixteen companies in the Region since 1999. It has eight investment professionals based in offices in London, Budapest, Prague, Warsaw and Sfântu Gheorghe (Romania).