Ryan Kavanaugh nails down deal terms for Relativity, needs court’s OK
Ryan Kavanaugh is the founder and chief executive of Relativity Media.
Ryan Kavanaugh and his group of investors said Wednesday that they have nailed down the terms of a deal to purchase his beleaguered movie studio, Relativity Media, marking another step toward taking the company out of bankruptcy.
The Kavanaugh-led investor group, which includes venture firm VII Peaks Capital, Ron Burkle-backed investment vehicle OA3 and independent investor Joseph Nicholas, agreed to pay $65 million in cash and $60 million in debt for the company.
Kavanaugh’s consortium had previously said they would pay $60 million and assume $30 million in debt.
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The company’s plan to exit Chapter 11 still needs to be approved by U.S. Bankruptcy Court Judge Michael Wiles. Relativity must now file a plan of reorganization with the court laying out its capital structure and strategy to grow its film business, along with digital media, music and sports arms.
The milestone comes a day after Relativity said it had completed the sale of its unscripted and scripted TV business to a group of its senior lenders for $125 million.
Relativity, based in Beverly Hills, filed for Chapter 11 bankruptcy protection in July after a series of box-office flops contributed to its inability to pay down a heavy debt burden. Court filings listed Relativity’s liabilities at nearly $1.2 billion, compared with assets with a book value of $560 million.
Founded by Kavanaugh in 2004, the company made a name for itself co-financing movies like “Bridesmaids” and “The Social Network,” but was more recently hampered by bombs such as “Out of the Furnace.”
“I am proud to say that we are moving quickly toward emerging from Chapter 11 with a healthy balance sheet and an incredibly strong collection of assets,” Kavanaugh said in a statement.
On Tuesday, Relativity lenders -- Anchorage Capital Group, Falcon Investment Advisors and Luxor Capital Group -- said they had finalized their purchase of Relativity Television, the unit known for shows such as MTV’s “Catfish.”
The TV company, which will get a new name, has received a $75-million capital commitment from the lender group to fuel growth.
Follow Ryan Faughnder on Twitter for more entertainment business coverage: @rfaughnder
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