Canadian movie theatre chain Cineplex (CGX) is selling its arcade business unit to an international investment company for $155 million in cash.
Toronto-based Cineplex has announced that OpenGate Capital has bought its “Player One Amusement Group” unit, which sells and services arcade games.
However, under terms of the deal, Player One will continue to supply arcade games to Cineplex’s movie theatres across Canada.
Cineplex positioned the deal as a way to unlock value for its shareholders while also helping it repay debt it acquired during the Covid-19 pandemic when its theatres were closed.
Cineplex currently has long-term debt of $814.8 million.
The sale of the arcade unit comes after Cineplex enjoyed a strong summer box office, with films such as “Barbie” and the Taylor Swift concert movie drawing audiences to its theatres.
Cineplex expects the arcade unit sale to close in 2024.
The stock of Cineplex has declined 16% over the last 12 months to trade at $8.78 per share. Over five years, the company’s share price is down 66%.