Digital Cinema Implementation Partners, LLC (DCIP) announced today that it has closed on a new $755 million credit facility comprised of an 8-year $680 million term loan B and a 5-year $75 million revolving credit facility. The proceeds from the term loan B were used to prepay existing debt and to pay fees and other transaction related expenses.
“This transaction provides DCIP substantial financial and operating benefits by extending the loan maturities associated with our digital deployment and significantly reducing our cost of debt,” said DCIP President and Chief Executive Officer Rich Manzione. “This will be achieved in part through the planned repayment in full of higher interest mezzanine-level notes, with cash on hand and borrowings under the new revolving credit facility.”
DCIP is a joint-venture formed by the three leading U.S. theater companies, AMC Entertainment Inc., Cinemark Holdings, Inc. (Cinemark), and Regal Entertainment Group, to replace 35mm projectors in the U.S. with digital projection systems. DCIP has deployed 14,327 digital projection systems in the U.S. as of March 31, 2013. Digital conversion of these exhibitors’ existing projection systems is expected to be completed in September 2013.
In addition to its U.S. digital deployment, DCIP actively manages the deployment of over 1,800 digital systems in Canada for Canadian Digital Cinema Partnership, a joint venture between Cineplex Inc. and Empire Theatres Limited, the two largest Canadian theater companies. DCIP has also agreed to manage the digital deployment of approximately 1,300 projection systems across Latin America for Cinemark.
“In addition to our existing digital deployment and management services, we will be looking to expand our operations to include new administrative and software services aimed at streamlining the operations and interactions of exhibitors and distributors, by leveraging the new digital infrastructure” said Manzione.
DCIP engaged Barclays and Credit Suisse as joint lead arrangers and joint bookrunners for the new term loan B facility, with Barclays also serving as administrative agent and Credit Suisse as syndication agent.