After years of investments, AMC Networks is buying a majority stake in RLJ Entertainment, a company that owns streaming service Acorn TV and Urban Movie Channel (UMC).
AMC Networks is buying the company as part of a going-private merger in a transaction valued at approximately $274 million. AMC Networks will pay, in cash, an aggregate of approximately $65 million to holders of RLJ Entertainment’s outstanding common stock, preferred stock and warrants not currently owned by AMC Networks, Robert L. Johnson and their respective affiliates.
Once the deal is wrapped, RLJ Entertainment will become an indirect subsidiary of AMC Networks, with founder Robert Johnson and his affiliates retaining a 17% stake in the company.
“Bob Johnson is a legend for good reasons that we are the beneficiaries of. His management team is extraordinary, having successfully transitioned Acorn TV from a home video and DVD business to a leading direct-to-consumer subscription service, and growing both Acorn TV and UMC in a competitive environment, by offering excellent, sought-after content and creating strong brands. In addition, RLJ Entertainment’s majority stake in the Agatha Christie library—a content brand which remains one of the most popular and venerable—provides AMC Networks with valuable IP opportunities,” said AMC Networks CEO Josh Sapan in a statement.
Sapan said the deal will bolster AMC’s digital strategy by giving it direct-to-consumer ad-free subscription services that it owns and controls.
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Last year, AMC Networks expanded RLJ’s Tranche A term loan from $13 million to $23 million.
The revised financing arrangements for RLJ came after AMC signed on late last year for a $65 million investment in the streaming video upstart from Johnson, founder of BET Networks. As part of that deal, AMC received warrants that could have resulted in it controlling 50.1% of the company.