AMC Theatres to Acquire Odeon & UCI Cinemas Group

AMC Theatres announced today that it has entered into a definitive agreement to acquire the largest theatre exhibitor in Europe, London-based Odeon & UCI Cinemas Group ("Odeon & UCI") from private equity firm Terra Firma in a transaction valued at approximately £921 million1 comprised of £500 million for the equity, 75% in cash and 25% in stock consideration, subject to lock-ups, and the assumption of £407 million of net debt as of March 31, 2016 to be simultaneously refinanced at closing. Assuming the transaction closes December 31, 2016 and a GBP/USD exchange rate of 1.30 the transaction is valued at approximately $1,199 million under UK GAAP.

In connection with the transaction, the company will make adjustments to conform Odeon & UCI financial statements to US GAAP. Those adjustments primarily include currency translation and the adjustment of certain operating leases to capital and financing lease obligations, with those obligations totaling approximately $195 million in additional debt.

The transaction is conditional upon antitrust clearance by the European Commission and is subject to consultation with the European Works Council.

With 242 theatres and 2,236 screens, Odeon & UCI is currently the #1 theatre operator in Europe. With 90 million tickets sold annually, it is also the #1 theatre operator in the UK & Ireland, Italy and Spain; the #2 theatre operator in Austria and Portugal; and the #4 theatre operator in Germany. Odeon & UCI had approximately $1,156 million of revenue for the last twelve months ending March 31, 2016. The combination of AMC and Odeon & UCI will result in AMC's operation of 627 theatres and more than 7,600 screens in eight countries.

AMC also is currently in a process to acquire US-based theatre exhibitor Carmike Cinemas (CKEC). AMC remains interested in, and committed to, closing the Carmike transaction. The Odeon & UCI transaction does not impact AMC's ability to complete the Carmike transaction as AMC has the financing commitments and flexibility to do both transactions.

Even without taking into account the potential Carmike transaction, the combination of AMC and Odeon & UCI will make AMC the largest movie theatre operator in the world.

Key Benefits of the Transaction

• Increases in attendance and revenue are expected at Odeon & UCI theatres after the introduction of AMC's proven and successful guest experience strategies. Emphasis will be placed on accelerating AMC's proven growth initiatives, featuring recliner seating, enhanced food and beverage and premium large format auditoriums, as well as further developing Odeon & UCI's innovative marketing, customer relationship management and pricing expertise
• The acquisition is expected to further diversify AMC's footprint by adding theatres with complementary global geographic and guest demographic profiles that strengthen the combined company's growth potential
• To complement AMC's domestic acquisition strategy, Odeon & UCI establishes a strong and scalable market position in Europe and creates a strong platform for AMC to pursue additional domestic and international growth when it can do so on terms favorable to AMC shareholders

"This is a once-in-a-generation opportunity to acquire Europe's leading cinema chain and create the world's biggest and best theatre operator," said AMC CEO and President Adam Aron. "With this opportunistic transaction, AMC will be extending the reach of our proven guest experience strategies to transform the movie-going experience for millions of movie goers in Europe. Odeon & UCI is a great business with iconic brands, strong market presence and passionate teams, and their impressive recent transformation is just the beginning. By introducing AMC's operational expertise, scale and innovative guest initiatives across Odeon & UCI's prime theatre locations and digital channels, we expect to drive attendance in these international markets and LEVERAGE the growing international demand for movie-going. While we acknowledge that there are some uncertainties related to Brexit, we are encouraged that current currency rates are highly favorable to AMC with the pound falling to a three decade low versus the dollar. In total, we believe this transaction will generate long-term value for our guests, our studio partners and our shareholders."

"With our shared vision for creating a world class cinema experience, we are delighted to be joining the AMC family," said Paul Donovan, Odeon & UCI CEO. "As an innovator in guest experiences, AMC is the ideal partner for the next stage of our long-term growth in Europe, and this is very exciting news for our guests, our colleagues and the wider film industry. In recent years, Terra Firma has supported our new management team and our transformation strategy, and so established a solid financial footing for the company. We have created strong momentum, and are looking forward to introducing many of AMC's ground-breaking guest experience strategies, and working with them on long-term initiatives to give our guests the best cinema hospitality experience in Europe. With a strong future film slate, and the unparalleled expertise of our combined teams, there are exciting opportunities ahead and strong prospects for growth."

Guy Hands, Chairman and Chief Investment Officer of Terra Firma, said, "We are delighted to realize our investment in Odeon & UCI after 12 years of ownership. In that time, over £600 million was invested in growing the business and delivering our long-term transformational strategy. Under Terra Firma, the number of Odeon & UCI screens increased from 1,453 in 2004 to 2,236 today, and the business has emerged as Europe's leading cinema operator. We are confident that under AMC's ownership, Odeon & UCI will continue to grow and thrive."

About AMC Theatres AMC (NYSE:AMC) is the guest experience leader with 385 locations and 5,380 screens located primarily in the United States. AMC has propelled innovation in the theatrical exhibition industry and continues today by delivering more comfort and convenience, enhanced food & beverage, greater engagement and loyalty, premium sight & sound, and targeted programming. AMC operates the most productive theatres in the United States' top markets, including No. 1 market share in the top three markets (NY, LA, Chicago). www.amctheatres.com

About Odeon & UCI Group Cinemas Odeon & UCI Cinemas Group is a leading European cinema operator with 242 cinemas and 2,236 screens. Odeon & UCI operates in four major markets: UK, Spain, Italy and Germany; and three smaller markets: Austria, Portugal and Ireland.

About Terra Firma Founded by Guy Hands in 1994, Terra Firma is one of Europe's leading private equity firms. Terra Firma specializes in the acquisition and fundamental transformation of asset-backed businesses in essential industries, focusing on investments in transformational private equity, operational real estate and infrastructure. Since 1994, Terra Firma has invested over €16 billion of equity and completed transactions with an aggregate enterprise value of €48 billion.

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