Legendary hollywood studio going public again
Since emerging from bankruptcy in 2010, MGM has returned to profitability.
The historic 88-year-old film studio, which was taken private in 2005 by Sony (SNE) and private equity firms TPG Capital, DLJ, and Providence Equity Partners, issued a brief statement announcing that it has submitted "a draft registration statement on a confidential basis" with the Securities and Exchange Commission for an IPO.
The Beverly Hills, Calif., company, more commonly known as MGM, did not disclose when the IPO would take place or at what price.
Since emerging from bankruptcy, MGM has returned to profitability by cost-cutting and selling its extensive movie and television catalogue to overseas partners. In 2011, MGM reported net income of $37.8 million from revenues of $699.1 million, according to Deadline. MGM's library includes more than 4,000 movies and 10,000 television episodes, including the James Bond, Rocky, and Pink Panther franchises. The studio is also a joint partner in Viacom (VIA) and Lionsgate's (LGF) EPIX premium movie channel.
MGM's bankruptcy plan involved hedge funds and other investors agreeing to convert the MGM bonds they acquired into equity. The company was valued at around $1.9 billion at that time. As the Los Angeles Times notes, these equity holders are inexperienced in running an entertainment company and are looking to sell their stakes quickly through this IPO.
MGM looks set to rake in a windfall in fall 2012, when two of its blockbuster movies are scheduled for release. First up is the latest James Bond movie, "Skyfall." Then at Christmas time, there is Peter Jackson's eagerly anticipated "The Hobbit: There and Back Again," which MGM is co-financing together with Time Warner's (TWX) New Line Cinema.
JPMorgan (JPM) and Goldman Sachs (GS) have been hired as the IPO's bookrunners, according to Bloomberg.
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The company has made at least 4 acquisitions in the space, and few people have paid any attention.
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