Wanda Film Holdings, a Chinese movie theater operator controlled by Chinese conglomerate Dalian Wanda Group, has agreed to acquire 1.875% of independent film production and distribution company Bona Film Group Ltd. for RMB300 million (US$43.5 million) as part of a wide-ranging strategic partnership.
The investment gives Bona Film a valuation of around RMB16 billion (US$2.3 billion), up from an estimated RMB15 billion net worth in December 2016, and a US$1 billion price tag when the former NASDAQ-listed firm was privatized in April 2016.
Bona Film is currently in the process of applying to launch an initial pubic offering in China with guidance from CITIC Securities, according to disclosure filings with the China Securities Regulatory Commission.
The deal is another step for Wanda Film to consolidate a fragmented cinema market in China. The company is currently the clear industry leader with a 13.6% market share of China's domestic box office sales in 2016, with 348 movie theaters and 3,127 screens in China.
As part of the latest strategic investment, all movie theaters owned by Bona Film will join the Wanda Film franchise, formerly known as Wanda Cinema Line Co., Ltd. Wanda Media, another unit under the parent Wanda Group, will be in charge of all pre-movie advertisement sales. The two plan to cooperate on film production investments as well, according to an announcement issued by Shenzhen-listed Wanda Cinema Line.
Bona Film was taken private in 2016 by management and investors, including Alibaba, Tencent, Fosun International, Sequoia Capital and SAIF Investments. In December 2016, it raised RMB2.5 billion (US$360 million) from investors led by Alibaba Pictures Group and Tencent.
Wanda Film is also a global player, with 53 movie theaters and 437 screens outside of China, following its acquisition of Australia's second largest cinema chain, Hoyts Group, in 2015. The company recorded box office sales of RMB6.2 billion (US$899 million) and RMB1.4 billion (US$203 million) in overseas box office sales in 2016, according to its annual report.