Vue buys German cinema group Cinestar for €221.8m

Cinema group Vue has entered into a deal to buy Event Hospitality & Entertainment's (EVT) German cinema division Cinestar for as much as €221.8m (£195.5m).

The agreement signifies Vue's largest ever acquisition, totalling 57 premium multiplex sites with 449 screens. This is the cinema chain's third acquisition this year, after it bought Cinema3D in Poland and Showtime Cinemas in Ireland.

Vue chief executive and founder Tim Richards said the move "further reinforces our commitment to international expansion".

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"Germany is an extremely important cinema market and is consistently in the top ten box office markets in the world. The acquisition of Cinestar supports our strategic and business objectives of developing and owning the highest quality cinema assets globally."

The transaction, which is split into an upfront payment of €130m and a variable consideration of up to €91.8m, will be financed from existing cash resources and €114m of underwritten debt financing.

Australian-listed firm EVT said the decision to sell its German unit was part of the film exhibition company's strategy to focus on growth-promoting parts of its business, based in Australia and New Zealand.

"The sale of Cinestar crystallises value for shareholders at an attractive price and there is the potential for upside to the value realised, should German market admissions grow," said EVT chief Jane Hastings. 

"We are confident that the divestment is in the best interests of shareholders and will allow us to recycle capital proceeds into other value accretive opportunities."