Alibaba Pictures, Tencent Lead $360M Funding Round in China's Bona Film Group
The latest round values Bona Film at $2.2 billion, more than double the $1 billion the company was worth when it privatized just eight months ago.
Alibaba Pictures Group and Tencent are the lead investors in a new $360 million (2.5 billion RMB) funding round in Bona Film Group, giving the private film studio a big boost to its planned expansion.
In April, Bona Film was pulled off NASDAQ and taken private by an investor group including company chairman Yu Dong, Alibaba Pictures Group, Tencent, Fosun International, Sequoia Capital and SAIF Investments. The latest round values Bona Film at $2.2 billion (15 billion RMB), more than double the $1 billion cost of privatization eight months ago.
"The Chinese film industry has entered a consolidation phase after years of wild growth," said Yu Yongfu, chairman of Alibaba Pictures, in a statement. "We see more companies voluntarily exiting the business or being acquired by stronger ones next year, which will be a real opportunity."
The other new investors in the latest round include Gold Stone Investment, a private equity arm of CITIC Securities Company; the Industrial and Commercial Bank of China; Macrolink Group; Providence Capital, a U.S. investment bank; the Hong Kong-based boutique investment bank CMB International Capital Corporation; Shenzhen-based manufacturer Leaguer Stock Co.; and Chinese real estate developer Zhongzhi Enterprise Group. Fosun International also joined the new round.
Bona Film produced and distributed 13 Chinese films in 2016, with box office revenue of $532.2 million (3.7 billion RMB), which amounts to an estimated 9 percent of China's total box office this year, the company said in a statement.
Through its ongoing $235 million slate financing deal with The Seelig Group and 20th Century Fox, Bona has participated in the global distribution of several global tentpoles, including The Martian, X-Men: Apocalypse, Ang Lee's Billy Lynn's Long Halftime Walk and Independence Day: Resurgence.
The dual investment from Alibaba and Tencent can be seen as a coup. It is rare for the two tech giants — and longtime rivals — to take stakes in the same company. Yu Dong said in his statement that Bona took investment from firms that offered synergies with Bona's ambitions.