Relativity Borrows $350 Million More for Movies and Expansion

Ron Burkle
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Billionaire investor Ron Burkle, who recently purchased a controlling 60 percent interest in Soho House Group for about $240 million, is considering building a hotel on property he owns one block from the Los Angeles-area outpost of the posh members-only club.

Ron Burkle plays a key role in the debt offering and joins the board of Relativity, which is still controlled by Ryan Kavanaugh.

Relativity Media has closed a deal for $350 million in additional debt financing, which will be used to fund films and for business expansion, it was announced Thursday. 

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“This marks a significant step forward for Relativity and firmly positions us for exciting new endeavors. We are thankful to our passionate partners for all of their efforts and support,” said Relativity’s CEO Ryan Kavanaugh in a statement.

Ron Burkle, who is already a major investor in Relativity, played a key role in the latest financing directly and through Colbeck Capital, in which he is a major investor. 
In January, Burkle acquired most of the equity interest in Relativity that had been held by New York hedge fund Elliott Management Corp. That followed a loan made late last year by Burkle and his Yucaipa Cos. to Relativity. 
Colbeck advised Relativity, structured the deal and, according to the announcement, is a significant participant in providing the money for the transaction. MESA Global also advised on the capital raised. 
“We have been actively involved with and considered acquiring many film studios during the past few years," Burkle said in a statement. "We’re always looking for good investment ideas, which are very hard to find in Hollywood and we believe we’ve made one with Ryan. After doing in-depth analysis of Relativity, we determined it is one of the most well positioned, unique studios poised for growth and structured for today’s unique content environment. We are proud to be in business with Relativity and will support them as they achieve new milestones."
Burkle is now joining the board of Relativity, along with Jason Colodne and Jason Beckman, who are partners in Colbeck. The announcement notes that Kavanaugh continues to own majority control of the company. 
“The deal includes at least a dozen of the most reputable banks and institutional lenders in the industry,” according to the announcement. “This is the first time that the company has raised secured corporate debt as it grows its expanding base of lending relationships.”
Relativity did not name the banks involved.