Carmike Cinemas is buying Sundance Cinemas for $36 million in cash, the country’s fourth-largest theater chain announced Tuesday.
The deal for the chain owned by Robert Redford‘s Sundance Group is for 37 screens and five theaters in San Francisco, West Hollywood, Houston, Seattle and Madison, Wisconsin.
The deal could provide a lift for Carmike, which has seen its share price fall more than 12 percent over the last month. The drop comes in the wake of a domestic box office that missed analysts projections in the third quarter, two negative earnings revisions and a strong sell recommendation from investment research firm, Zacks. Carmike’s stock rose 1.3 percent Tuesday to $22.04
Sundance Cinemas has specialized in independent, documentary and foreign-language films as well as some studio projects and is headquartered in Westlake Village, California.
The deal represents a strategic shift for Carmike, which operates mainly discount theaters. Sundance Cinemas has been a leader in the move to offer high-end amenities like dinner, drinks and lounge seating to audiences.
The first theater, Sundance 608, opened in 2007 at the Hilldale Shopping Center in Madison and contains six stadium-seated auditoriums, along with a cafe, bistro, bar, rooftop bar and Gallery 608, which sells local and Sundance-related arts and merchandise.
When the transaction is completed, Carmike will have a total of 274 theaters with 2,909 screens in 41 states.
Salem Partners, a Los Angeles-based investment bank, brokered the deal.