3D Technology Company RealD to Be Acquired in $551 Million Deal

Screening Room
Ray Kachatorian

Features its own entrance and includes four 1932 original Radio City Music Hall chairs.

Upon completion of the sale to private equity firm Rizvi Traverse, the company will become privately-held.

RealD earlier this year said it would be exploring "a full range of strategic alternatives" that could lead to a sale of the provider of 3D technology for films.

On Monday, the company said it has agreed to be acquired by Rizvi Traverse Management, a private equity investor in the media, entertainment and technology sectors, for $11 per share, in an all-cash transaction valued at approximately $551 million, including net debt.

Rizvi's past investments include ICM, Summit Entertainment, Playboy, Twitter, SpaceX, Square and Snapchat. RealD last year rejected a takeover approach from Starboard Value to be acquired for $12 a share. As part of RealD's strategic review, Starboard and others had a chance to make binding offers, with Rizvi's offer coming out on top.

Upon completion of the Rizvi deal, RealD will become a privately-held company. The RealD board has approved the agreement and recommends that RealD shareholders vote in favor of the transaction, the company said.

Frank Biondi Jr., lead independent director of RealD, said: "Over the past year, the RealD board of directors, in consultation with its advisors, has engaged in a comprehensive review of strategic alternatives to enhance value for shareholders. This transaction with Rizvi Traverse concludes that review and provides immediate and substantial cash value to RealD shareholders at a significant premium to the company’s unaffected share price.”

Michael Lewis, chairman and CEO of RealD, said: "Since founding RealD in 2003, we have built the company into the world’s leading 3D cinema platform, with over 27,000 worldwide screens. I am excited about the future of RealD, where in partnership with Rizvi Traverse, we can continue to maximize the value inherent in RealD’s cinema platform and leading IP portfolio. As a private company, RealD will have the flexibility and resources to further invest in our continued cinema leadership and visual technology innovation."

RealD said Lewis plans to reinvest his stake in the company into the transaction and "has signed customary support agreements pursuant to which he has agreed to vote his shares in favor of the merger." Lewis will continue to serve in the role of chairman and CEO of RealD.

RealD on Monday also reported a loss of $7.9 million, or 15 cents per share, for its fiscal second quarter, below analysts' estimates. In the year-ago period, it had lost $751,000, or 2 cents per share. Its quarterly revenue reached $38.5 million, ahead of Wall Street expectations, but below the year-ago's $47.8 million.