Struggling 3-D cinema technology company RealD Inc. said it had reached a deal to sell the company to Rizvi Traverse Management for $551 million.
The Beverly Hills-based company said Rizvi, a leading private equity investor in the media sector, had agreed to acquire RealD for $11 per share in an all-cash transaction that would take the company private.
Rizvi's other investments have included Summit Entertainment, ICM, Twitter, SpaceX, Square and Snapchat.
The offer follows a takeover attempt more than a year ago from Starboard Value, which wanted to buy RealD for $12 a share. RealD rejected that offer from Starboard, which owns about 10% of the company, according to FactSet.
RealD's board of directors approved the agreement with Rizvi and recommended shareholders vote in favor of the transaction.
"Over the past year, the RealD board of directors, in consultation with its advisors, has engaged in a comprehensive review of strategic alternatives to enhance value for shareholders," said Frank J. Biondi, lead independent director of RealD's board. "This transaction with Rizvi Traverse concludes that review and provides immediate and substantial cash value to RealD shareholders at a significant premium to the company's unaffected share price."
The agreement with Rizvi represents a premium of about 19% over Real's closing stock price on Oct. 1 2014, prior to when Starboard made its offer, according to the statement. The deal with Rizvi represents a 4.1% premium of over Friday's closing price of $10.57. Shares in RealD rose 2% in early afternoon trading.
Chief Executive Michael Lewis will continue to serve as chairman and chief executive officer of RealD.
Founded in 2003, RealD is one of the world's leading providers of 3-D cinema equipment and glasses. Its systems are used in more than 27,000 screens worldwide.
But the company has struggled in recent years as the popularity of 3-D viewing has waned. The company on Monday reported a second-quarter loss of $7.9 million, or 15 cents a share, compared with a loss of $751,000 or 2 cents a share, a year earlier. Revenue fell nearly 20% to $38.5 million.