CMC, FountainVest Sell Stake in Imax China

THR Richard Gelfond 160428_Richard_Gelfond_173_FR - H 2016
Allison Michael Orenstein

THR Richard Gelfond 160428_Richard_Gelfond_173_FR - H 2016

The two Chinese private equity investors will remain in business with Imax via its Chinese film fund and virtual reality fund.

Chinese private equity investors CMC Capital Partners and FountainVest Partners have sold a combined 5.9 percent of their shareholding in Imax China, the companies announced Thursday.

The sale was made at a price of HK$39.72 ($5.11) per share to a prominent international investment bank, Imax said.

Shares of Imax China rose 4.5 percent to close at $5.38 (HK$41.80) on Wednesday. The company has a market capitalization of $1.92 billion,

"CMC and FountainVest have been valued partners of Imax China for nearly three years. We believe this sale will help promote increased liquidity and accomplishes a smooth transition of Imax China shares into the market," said Richard Gelfond, chairman of Imax China.

CMC, headed by Chinese media mogul Li Ruigang, is the local investment partner to many Hollywood brands in China. Its investment portfolio includes stakes in Oriental DreamWorks and Warner Bros.' Chinese film studio, Flagship Entertainment. It also has invested in California-based virtual reality startups Jaunt VR and Next VR. Shanghai and Hong Kong-based FountainVest, led by former Goldman Sachs banker Frank Tang, controls some of China's largest private equity funds.

CMC and FountainVest took a 20 percent stake in Imax Corp's China business in 2014 for $80 million. Imax later spun off its China business as an independent subsidiary, listing on the Hong Kong stock exchange in October 2015 and raising $248 million. 

Imax Corp., FountainVest and CMC sold a combined 17.4 percent stake, or 62 million shares, during the IPO. In March 2016, CMC and FountainVest offloaded another 20 million shares.

CMC and FountainVest will remain in business with Imax via two investment funds, however. The firms are co-backers of Imax's virtual reality investment fund and the Imax China Film Fund, which was set up in June 2016 to invest in Chinese-language film projects shot in Imax.

"We are pleased that CMC will remain a key partner of Imax and a strategic investor in the Imax China Film Fund and the Imax VR Fund," Gelfond added.