Adding to its stature as a motion picture company, Cannon Group said Wednesday that it has agreed to pay about $24 million in cash for Commonwealth Theatres of Kansas City, Mo., the sixth-largest chain of movie theaters in the country.
Los Angeles-based Cannon, a fast-growing independent movie producer whose B-grade projects once were the butt of Hollywood jokes, will keep Commonwealth's present management and its existing plan to open 70 screens by October, said Barry Lublin, Cannon chief financial officer. Commonwealth now operates 425 screens in 12 states, primarily in the Midwest, he said.
"It is our intention that Commonwealth, operated as a wholly owned subsidiary, will pursue an aggressive growth plan," Cannon Chairman Menahem Golan and President Yoram Globus said in a statement.
"We've always believed in exhibition," Lublin said. "We've shown that we've always been able to make some decent money and turn around some exhibition chains in Europe."
Lublin said Cannon hopes to build Commonwealth, which is marginally profitable, into a "major force in the market."
"We think we could do better but with the (current) management," he said. "We think they're excellent, and we're going to give them support."
Cannon recently raised $200 million in a public offering to spend on acquisitions, Lublin said. Cannon last week said it bought Screen Entertainment of Britain for about $271.3 million at current exchange rates. That purchase made Cannon the largest motion picture exhibitor in the United Kingdom with 485 screens.
Cannon also owns Cannon Tuschinski Theatres, the Netherlands' biggest theater chain with 49 screens, and Cannon Cinema Italia in Italy with 53 screens.
The Commonwealth agreement is subject to the approval of Commonwealth's board of directors, the Justice Department and the Federal Trade Commission.
Over the last few years, Golan and Globus have been trying to escape their reputation as producers of low-budget B movies and have turned out some critical hits, including the recent "Runaway Train."
Cannon reportedly is one of several companies interested in buying part of MGM Entertainment, which is owned by Ted Turner's Turner Broadcasting System.