Imax Corp. disclosed plans Thursday for an intial public stock offering in Hong Kong, underscoring the Canadian company's growing business in the world's second-largest film market.
The big screen cinema company said in a regulatory filing that its China subsidiary had filed an application for an IPO on the Hong Kong Exchange.
The company did not say when it would hold the IPO but the listing had been widely expected by investors. Imax management had previously disclosed plans for a stock listing in China.
Imax has done booming business in China, benefiting from key partnerships with Chinese media companies, including Wanda Cinemas, and a cinema-building spree in the world's most populous country. Imax has 239 screens in China with another 219 planned.
China's box office revenue jumped 34% to $4.8 billion in 2014, according to the Motion Picture Assn. of America.
Capitalizing on that growth, Imax China in 2014 posted a profit of $22.6 million on revenue of $78.2 million, compared to 2013 earnings of $17.4 million on revenue of $56 million.
"We plan to pursue potential screening opportunities for TV dramas, live shows, sports events and other alternative content in our theaters, as well as to explore the possibility of working with certain third parties to establish a fund to finance Chinese-language films," Imax stated in in the IPO prospectus.
Imax set the stage for its planned IPO last year when it sold a 20% stake in its China film business for $80 million to CMC Capital Partners, an investment fund specializing in media and entertainment; and FountainVest Partners, a private equity firm. Imax executives have said that having local Chinese ownership would help facilitate an IPO in that country.
Imax said it plans to build a digital remastering facility and screening room in China to allow Chinese language-films to be converted into the Imax format.
"This facility is expected to be fully operational by the end of 2015, and we believe that it will be highly attractive to filmmakers in the PRC [People's Republic of China] and strengthen our partnerships with them," Imax said.
Investors welcomed the news. Imax shares climbed 5% in early afternoon trading at $40.54.