Ryan Kavanaugh-Led Consortium Says It Has Completed Its Acquisition of Relativity

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The $125 million deal sets the stage for a reorganization plan to be submitted to the Bankruptcy Court.

Ryan Kavanaugh's Relativity Media said today that an investor consortium led by Kavanaugh and calling itself TJ has completed its acquisition of Relativity's assets, with the exception of its TV unit. The group, which initially proposed over $60 million in cash and assuming $30 million in debt, said the terms of the transaction now call for the consortium to acquire Relativity’s senior secured debt for $65 million in cash and $60 million in debt.

The company’s TV unit has already been sold for $125 million to a creditors group that includes Anchorage Capital, Falcon Investment Advisors and Luxor Capital.

The consortium said that it will shortly file a plan of reorganization with the U.S. Bankruptcy Court detailing the company's capital structure and its strategy for long-term growth with film, digital, music, sports and branded entertainment.

Kavanaugh said in a statement, "I am proud to say that we are moving quickly toward emerging from Chapter 11 with a healthy balance sheet and an incredibly strong collection of assets, including Relativity Studios. We thank our partners and investors who have worked tirelessly to get us to this point, and our employees for their continued focus and commitment. Together, we will continue to build Relativity’s asset base to offer brands unique access to a fully integrated 360 degree content engine.”

The investor group, which includes VII Peaks Capital, investor Joseph Nicholas and the Ron Burkle-backed investment firm Q3, added in a statement of its own: "Relativity's 360-degree content engine is one which we have not seen in any other content company. The ways in which content is created and distributed, while incorporating and partnering with global brands, is highly unique. When that is paired with Relativity's risk adjusted model, the scripted television platform and their joint ventures in India and China, it makes the future particularly exciting. We look forward to building the new Relativity and taking it to the level at which the company belongs."

Earlier this week, the deal appeared to hit a snag when Relativity filed an emergency motion seeking to compel VII Peaks to reserve $30 million pledged to help Kavanaugh's company close the transaction, alleging that VII Peaks wanted certain conditions be met first.

Assuming the Bankruptcy Court judge approves the latest transaction, Kavanaugh will then have to present a reorganization plan before it can emerge from Chapter 11 bankruptcy, which it filed for in July.