TPG Growth and Hony Capital launch next generation, fully-integrated film studio

Producer Robert Simonds, TPG Growth, Hony Capital and producer Gigi Pritzker have launched a next generation film studio and closed multiple financing and distribution transactions. Incubated by TPG Growth and Simonds, the studio’s strategy is to finance, produce and self-distribute 8 to 10 star-driven theatrical films for the global markets per year.

PRESS RELEASE

Producer Robert Simonds, TPG Growth, the middle market and growth equity investment platform of TPG, Hony Capital, a leading private equity firm in China, and producer Gigi Pritzker today announced the launch of a next generation film studio, and the closing of multiple financing and distribution transactions. Incubated by TPG Growth and Mr. Simonds, the studio’s strategy is to finance, produce and self-distribute 8 to 10 star-driven theatrical films for the global markets per year. Between the debt and equity financing closed today, and commitments for distribution from theatrical and other distribution partners, the studio expects to invest well over $1 billion in new film production over the next five years.

As an anchor investor, Hony Capital brings its unique angle and deep connections in China, the second largest movie market, to the business. This marks one of the most significant investments by a mainland Chinese company into a U.S. film studio. In parallel, the company also announced a strategic partnership for film and television production with SMG Pictures, a leading studio backed by China’s largest entertainment conglomerates. Additional equity and debt are provided by business interests of film producer and OddLot Entertainment CEO Gigi Pritzker, who will also sit on the board. The studio worked closely with J.P. Morgan Chase & Co. to structure and arrange senior debt financing for the business, which was underwritten by J.P. Morgan Chase & Co. and Bank of America Merrill Lynch, and includes placement of a separate Prints and Advertising facility.

The studio will initiate, develop, produce and distribute its own film content. Mr. Simonds will serve as Chairman and CEO of the new studio, which will focus on star-driven, mid-budget films. The films will feature stars in commercial roles highlighting their signature strengths and appealing to movie-goers with a broad range of genres including comedy, action and drama. The studio’s veteran executive team includes Chief Operating Officer Thomas McGrath (former COO of Viacom Entertainment), Executive Vice President of Corporate Development & General Counsel Noah Fogelson (former CEO of Crest Animation), and Executive Vice President of Content Sophie Watts. Additional senior executive appointments will be announced shortly.

The studio is also uniquely positioned to control its own wide domestic theatrical distribution through its unprecedented direct distribution agreements with leading North America theater chains AMC Theatres, Regal Entertainment Group, Cinemark and Carmike. The studio expects to make additional announcements in the near term about further distribution deals concerning the pay-TV window and home entertainment. Maintaining ownership of the full stream of rights in its content, the studio is also exploring digital distribution partnerships with leading online entertainment providers around the world.

“The seismic shifts in the entertainment industry have produced exciting new opportunities in content, production and distribution. Together with our partners, we are creating a studio with the flexibility, global scale, and experience required to seize this opportunity,” said Mr. Simonds. “Star-driven, mid-budget films are an underserved market and with our proven track record in this area, we are uniquely positioned to successfully partner with traditional distributors in North America, expand in the vast Chinese market, and capitalize on new, still developing digital channels.”

“With Bob Simonds, we have built an independent company with the capabilities of a major studio — a fully integrated and truly global production and distribution company,” said Bill McGlashan, Managing Partner and Founder of TPG Growth. “We are delighted to partner with the leading theater chains in North America as we launch and expand this business, and as developers and owners of original content, we look forward to working with the many new and exciting digital distribution channels around the world.”

“This is the first investment a Chinese company has made into a Hollywood studio; and it is a perfect example of how investors bring in various but unique resources to create a new-age studio,” said John Zhao, CEO of Hony Capital. “Together with its strategic partners like SMG and PPTV, Hony Capital will bring in the best mix of China’s market resources to help Bob and his veteran team execute the first global-market focused, vertically-integrated studio that Hollywood has seen in a decade.”

Pritzker stated, “I am confident in Bob’s vision for this company and the partnership he has assembled. I look forward to seeing it thrive. As both a filmmaker and an investor, I look forward to finding strategic opportunities to work with him on upcoming projects.”

“Bob and his team are perfectly positioned to build this next generation studio, partnering with established industry leaders to enable global stars to entertain their fans in commercially successful films,” said Elizabeth Frank, Chief Programming and Content Officer of AMC Theatres. “They see great potential in connecting directly with movie-loving consumers through theater chains and other distributors to maximize box office success and then other release windows.”

Board members of the new company include: Robert Simonds; David Bonderman, Founding Partner of TPG; Bill McGlashan, Managing Partner and Founder of TPG Growth; Frank Biondi, Former President and CEO of Viacom, Inc. and Former Chairman and CEO of Universal Studios; Tony Vinciquerra, Former Chairman and Chief Executive Officer of Fox Networks Group; John Zhao, CEO of Hony Capital; Yang Wenhong, Director of Film and Television at Shanghai Media Group; and Gigi Pritzker, Founder of OddLot Entertainment.

The Raine Group served as the exclusive financial advisor to the studio.

About Robert Simonds
Robert Simonds is an American film producer. Simonds holds one of the very best studio track records for profitability for star-driven, mid-budget films. His over 30 movies have generated well in excess of $6 billion in worldwide revenue, and include CHEAPER BY THE DOZEN and THE PINK PANTHER with Steve Martin, BIG DADDY and THE WATERBOY with Adam Sandler, and THIS MEANS WAR with Reese Witherspoon. Other notable hits include THE WEDDING SINGER, HALF BAKED, JUST MARRIED, and HAPPY GILMORE.

About TPG Growth
TPG Growth is the middle market and growth equity investment platform of TPG, the global private investment firm. With $3.6 billion under management, TPG Growth targets investments in a broad range of industries and geographies, utilizing leveraged buyout, growth equity, and private investment in public equity (PIPE) structures. The firm is backed by the resources of TPG, which has $59 billion of assets under management. TPG and TPG Growth have invested in many well-known media, entertainment and technology businesses including CAA, Evolution Media Growth Partners, Fender, Hotwire, Sabre Holdings (Travelocity), SuccessFactors, SurveyMonkey, Uber Technologies and Univision. TPG Growth has offices in the United States, China, India and Singapore. For more information visit: www.tpggrowth.com.

About Hony Capital
Hony Capital, founded in 2003 and sponsored by Legend Holdings, is a leading private equity firm in China. As a China-focused investment firm with about US$7.0 billion assets under management, Hony employs a “value creation by providing value added services” investment philosophy to increase the intrinsic value of its portfolio companies. Hony primarily focuses on investments in consumer, advanced manufacturing, healthcare and service, and has helped a number of Chinese enterprises grow into sector leaders. Hony invests predominantly in Chinese SOEs restructuring and growth capital opportunities, and has also expanded into cross-border investments. Hony has invested in multiple leading media companies in China, including SMG Pictures, PPTV, Uyoung and HappyGo. For more information visit: www.honycapital.com.

About SMG Pictures
Shanghai Media Group (SMG) is one of the biggest media and entertainment enterprises in mainland China, with offices in both Shanghai and Beijing. While SMG’s core business lies in TV broadcasting and related media entertainment services, SMG Pictures focuses on the development, production, marketing and distribution of both local and international films, as well as TV drama production. In 2013, SMG Pictures successfully distributed ESCAPE PLAN in mainland China, grossing a staggering $41 million in box office, making up for more than 1/3 of the film’s global gross total.

About Gigi Pritzker
Pritzker is an accomplished film and stage producer, businesswoman, and an active philanthropist, who serves as CEO of film production and financing company OddLot Entertainment. Through OddLot Entertainment, which she founded in 2001, Pritzker has teamed with leading filmmakers to produce a range of high-quality motion pictures, such as 2013’s film adaptation of Orson Scott Card’s futuristic sci-fi novel ENDER’S GAME; 2013’s critically acclaimed comedy hit THE WAY, WAY BACK starring Steve Carell; 2012’s noir favorite, DRIVE with Ryan Gosling; and 2010’s Academy Award®-nominated adult drama RABBIT HOLE. Upcoming highly anticipated OddLot projects include Jon Stewart’s directorial debut, ROSEWATER, and two projects under the Lionsgate arrangement – filmmaker Ivan Reitman’s NFL-themed dramatic comedy, DRAFT DAY, along with MORTDECAI, with Johnny Depp. Projects in development include QUEEN OF HEARTS and the definitive Albert Einstein biopic EINSTEIN.

Pritzker has actively worked to strategically expand OddLot Entertainment’s footprint in the global motion picture business, creating the joint venture with Lionsgate in September 2013, partnering with Nick Meyer in 2011 to create the foreign sales company Sierra/Affinity, and staking a position in video-on-demand distribution through a partnership with Cinetic Rights Management.

About OddLot Entertainment
OddLot Entertainment is a Los Angeles-based film and television production company that develops, produces, finances and arranges distribution for quality, commercial properties for both the domestic and international markets. OddLot is currently producing Ivan Reitman’s DRAFT DAY starring Kevin Costner which will be released by Summit Entertainment, MORTDECAI starring Johnny Depp, Gwyneth Paltrow, Ewan McGregor, Paul Bettany and Olivia Munn and which will be released by Lionsgate, and Jon Stewart’s upcoming directorial debut ROSEWATER.

OddLot recently produced ENDER’S GAME written and directed by Gavin Hood and starring Harrison Ford, Ben Kingsley, Viola Davis, Hailee Steinfeld, Abigail Breslin and Asa Butterfield as “Ender,” as well as THE WAY, WAY BACK, a comedic drama from Academy Award®-winning writers Jim Rash and Nat Faxon, which was acquired by Fox Searchlight at the 2013 Sundance Film Festival. OddLot’s other credits include producing the critically-acclaimed DRIVE, RABBIT HOLE, and FROM PRADA TO NADA. Past credits for Gigi Pritzker, OddLot’s CEO, include THE WEDDING PLANNER, GREEN STREET HOOLIGANS and MEAN CREEK.

In March of 2011, OddLot expanded its footprint into foreign distribution by creating the foreign sales company Sierra/Affinity. This year OddLot commenced a multiyear, multipicture co-financing and distribution deal with Lionsgate which provides both companies a committed framework to co-produce and distribute films.

For Robert Simonds
Abernathy MacGregor
Mary Beth Grover, mbg@abmac.com
Liz Micci, edm@abmac.com
212-371-5999

For TPG Growth
Owen Blicksilver PR, Inc.
Lisa Baker, lisa@blicksilverpr.com, 914.725.5949
Jennifer Hurson, jennifer@blicksilverpr.com, 845.507.0571

For Gigi Pritzker
Principal Communications Group
Paul Pflug, paul@pccommgroup.com
323-658-1555

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