November 9, 2015—Global visual technology company RealD Inc. (NYSE: RLD) and Rizvi Traverse Management, LLC, a leading private equity investor in the media, entertainment and technology sectors, today announced that they have entered into a definitive agreement pursuant to which Rizvi Traverse will acquire RealD for $11.00 per share, in an all-cash merger transaction. The transaction is valued at approximately $551 million, including net debt. Upon completion of the transaction, RealD will become a privately held company. The RealD Board of Directors approved the agreement and recommends that RealD shareholders vote in favor of the transaction.
Under the terms of the agreement, RealD shareholders will receive $11.00 in cash for each share of RealD’s common stock. This represents a premium of approximately 19% to RealD’s closing stock price on October 1, 2014, the last unaffected trading day prior to the announcement from Starboard Value LP of its non-binding indication of interest to purchase all outstanding shares of RealD’s common stock.
Frank J. Biondi, Jr., Lead Independent Director of RealD, commented, “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 V. Lewis, Chairman and Chief Executive Officer of RealD, commented, “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.”
Ben Kohn, Managing Partner of Rizvi Traverse, added “RealD is the market leading 3D cinema platform with a history of innovation and strong growth prospects. We are honored that the Board of Directors of RealD has selected Rizvi Traverse to partner in their future growth. We are excited to partner with Michael Lewis and the current management team in this new chapter for RealD.”
In connection with the merger agreement, Mr. Lewis intends to reinvest his equity into the transaction and has signed customary support agreements pursuant to which he has agreed to vote his shares in favor of the merger. Mr. Lewis will continue to serve in the role of Chairman and Chief Executive Officer of RealD.
The proposed transaction, which is structured as a one-step merger with RealD as the surviving corporation, is subject to closing conditions including receipt of shareholder and regulatory approvals. The transaction requires the affirmative vote of the holders of a majority of the outstanding shares of the Company’s stock, which will be sought at a special meeting of the Company’s shareholders, which is expected to be held in February 2016. The transaction is currently expected to close in the Company’s fourth quarter of fiscal 2016 or shortly thereafter.
Moelis & Company LLC is acting as sole financial advisor and Wachtell, Lipton, Rosen & Katz and Cooley LLP are acting as legal advisors to RealD’s Board of Directors. Freshfields Bruckhaus Deringer US LLP is acting as sole legal advisor to Mr. Lewis. Latham & Watkins LLP is acting as sole legal advisor to Rizvi Traverse.
About RealD Inc.
RealD is a leading global licensor of 3D and other visual technologies. RealD is the world’s most widely used 3D technology and our extensive intellectual property portfolio is used in applications and products that enable a premium viewing experience in the theater, the home and elsewhere.
RealD was founded in 2003 and has offices in Beverly Hills; Boulder; London; Moscow; Shanghai; Hong Kong; and Tokyo. For more information, please visit our website at www.reald.com.
About Rizvi Traverse Management, LLC
Rizvi Traverse Management, LLC is a leading private equity investor who primarily invests in the media, entertainment and technology sectors. Past investments include ICM, Summit Entertainment, Sesac, Playboy, Twitter, SpaceX, Square, and Snapchat to name a few. For more information visit www.rizvitraverse.com.