Legendary Entertainment, the studio behind “Dune,” is selling a $760 million equity stake to the investment company Apollo, the companies announced Monday.
The minority investment comes as Legendary concluded its most profitable year to-date in 2021 on the backs of “Dune” and “Godzilla vs. Kong.”
The deal will allow Legendary to regain operational and creative control from the China-based company Dailan Wanda.
“Legendary is known for its world-class content and franchise features and has strong relationships with top studios and streaming platforms alike,” Apollo Private Equity Partners Aaron Sobel and Lee Solomon said in a statement. “In making this fund investment, we were excited by the velocity in their television and film business, the strong management team and the massive secular tailwinds driving the industry. Already, Legendary generates significant free cash flow that’s reinvested in high-growth categories, and we also see compelling M&A opportunities ahead. We view Legendary as a platform for potential follow-on investments and are excited to support Josh, Mary, Chris, Ron and the rest of the Legendary team.”
“We are excited to welcome Apollo as a new shareholder in Legendary and equally important as a thought partner in our business,” Legendary CEO Joshua Grode said. “This fund investment from Apollo validates our success to-date and invigorates our growth plans with a strategic capital partner who shares our goal to grow the business. The creative leadership of Mary Parent combined with our commitment to make culturally relevant, entertaining content allows us to continue to build on this success now with the support of Apollo as well as our partners at Wanda.”
Legendary has been a major player in the film industry as theaters have struggled to get audiences back in seats after being closed for a year due to the COVID-19 pandemic. Released as part of its production partnership with Warner Bros., “Godzilla vs. Kong” was the first major blockbuster to hit theaters in 2021, with thousands of theaters in the U.S. scheduling their reopenings around it. The film grossed $467.8 million worldwide, higher than the $386 million grossed by “Godzilla: King of the Monsters” in 2019.
“Dune,” meanwhile, is shaping up to be a hit for Warner Bros. on both theaters and streaming, helping drive HBO Max subscriptions to over 73 million while grossing just under $400 million worldwide. The film is expected to be an Oscar contender and Legendary is set to produce “Dune: Part Two” for release in 2023.
Apollo, meanwhile, becomes the latest private equity firm to make a heavy investment in the entertainment industry; joining the likes of RedBird Capital, which bought a stake in LeBron James’ SpringHill Company; and Blackstone, which has funded the recent acquisition of Reese Witherspoon’s Hello Sunshine by nascent media venture Candle Media, run by former Disney execs Kevin Mayer and Tom Staggs.
LionTree served as financial advisor for the Apollo Funds in the transaction. Moelis & Company served as lead financial advisor to Legendary, and Paul Weiss and Stroock served as legal counsel.