STX Entertainment, the US-based film and television studio backed by internet group Tencent and information and communications technology provider PCCW, has raised $700m in debt and equity financing, Los Angeles Times reported yesterday.
Private equity firm Hony Capital and TPG Growth, a subsidiary of private equity group TPG, co-led the round according to an internal memo by STX’s chief financial officer, Andrew Warren. The equity portion was undisclosed but is higher than $100m.
Founded in 2014, STX has produced a series of feature films including Molly’s Game, The Upside and Bad Moms, in addition to several co-productions, generally budgeting the films at between $20m and $80m.
The company has a number of TV projects in development and is exploring virtual reality content and live event promotion. It had considered an initial public offering in Hong Kong in 2018 but cancelled plans due to market uncertainty.
The cash will support an increase in STX’s cinematic output from 10 films in 2018 to 15 this year, as well as strategic acquisitions and the development of its TV activities, a person familiar with the matter told the LA Times.
Tencent and PCCW joined Hony Capital, TPG Growth, William Wrigley Jr, Dominic Ng and business interests of Gigi Pritzker, Michael Pucker and their immediate family to supply an undisclosed amount of funding for the company in 2016 at a $1.5bn valuation.
STX’s shareholders also include media and entertainment company Madison Wells Media and mass media group Liberty Global, while JPMorgan, Bank of America, East West Bank, Union Bank, Comerica, CIT, Aperture and Sun Trust have provided debt financing according to the LA Times.
Warren said in the memo: “This financing represents another major milestone for STX and shows the unwavering support and enthusiasm of our investors. There is no question this transaction is a direct acknowledgment of your achievements.”
