Consortium Acquires Controlling Stake in Russia’s Cinema Chain Karo Film
Entrepreneur Paul Heth has been appointed Karo Film's CEO.
MOSCOW -- On Dec. 13, a consortium backing Moscow-based media entrepreneur Paul Heth and consisting of Baring Vostok Private Equity, UFG Private Equity and the Russian Direct Investment Fund, announced the acquisition of a controlling stake in the Russian cinema chain Karo Film.
The amount of investment was not disclosed, but Karo said that the investment consortium “will additionally support a circa $100 million investment initiative to open new multiplex cinema venues under the Karo brand over the next three years.”
Heth, whose credits in Russia include Kodak Kinomir, the cinema chain Kinostar Delux and the film production company Monumental Pictures, formed in the mid 2000s in collaboration with Sony Pictures Entertainment, has been appointed Karo’s CEO. The company’s co-founders, Leonid Ogorodnikov and Oleg Andreyev, are to retain undisclosed “significant” stakes in the business, while Ogorodnikov will remain Karo’s chairman of the board.
“We will immediately make a substantial investment into Karo’s existing infrastructure to improve and upgrade Karo’s 3D and large format digital projection capacity, improve its food and beverage offerings and will work to enhance the efficiency of the company’s overall operations,” Heth said in a statement. “In the near future we will also be announcing a number of new locations to include the largest cinema developments ever undertaken in Russia.”
“I was extremely impressed with the caliber of the investment group assembled by Mr. Heth, all of whom are focused on long term value creation,” Ogorodnikov added. “With this announcement we are positioned to take Karo to the next level.”
With 31 modern movie theaters comprising of 197 screens in Moscow, St. Petersburg and several other biggest cities, Karo Film is Russia’s second largest cinema chain after Cinema Park. Its 2012 sales are predicted to reach $190 million this year, the company said.