Joe Roth's 14-year-old Revolution Studios has been acquired for $250 million by Fortress Investment Group, according to several sources close to the sale. Revolution was carrying roughly $175 million in debt, which was absorbed by Fortress, which borrowed approximately $150 million to make the sale, say several sources familiar with the transaction. Sun Trust was the lead lending bank.
Fortress made the announcement Thursday as part of disclosing its plans to recapitalize Revolution -- which stopped film production in 2007 -- and position it for growth by developing, producing and distributing new content for TV and exploiting its library of 50 films and over 200 TV episodes.
A previous report suggested the company would sell for $500 million but sources tell Variety that figure is inaccurate.
Roth and Revolution retained Evolution Media Capital at the close of 2013 to run a structured process to find a new investor as the studios' previous credit facility was coming to an end at the beginning of 2014.
Roth founded Revolution in 2000 as a strategic partnership with Starz Entertainment, Sony Pictures and 20th Century Fox. Other key Revolution execs included Rob Moore, the vice chairman of Paramount Pictures; Todd Garner, who became a Sony-based producer; and the late Tom Sherak.
The company was never able to deliver a blockbuster hit and was better known for disappointments such as "Gigli" and "Hollywood Homicide." Its notable releases included "Black Hawk Down," "Maid in Manhattan," "Anger Management" and "Daddy Day Care."
Roth has become a successful producer in the intervening years with "Alice in Wonderland" and "Maleficent" as his most notables titles.
Revolution CEO Vince Totino and chief operating officer Scott Hemming will lead the newly capitalized company. Under a multi-year deal, Roth will continue his relationship with the studio, developing TV projects through a first-look deal and as a strategic adviser.
"The time is right for us to expand the Revolution brand through the development of original projects as well as those that are based on the valuable intellectual property in the Revolution library," said Totino in a statement. "With Fortress's financial resources and industry expertise and our continued partnership with Joe Roth, we plan to grow Revolution substantially in the coming years."
New York-based Fortress is a publicly held investment company managing over $60 billion in funds.
"This is an extremely attractive investment for our funds, with significant inherent value in Revolution's library of films and an exceptional management team in place that can now focus on growth through the development of new projects in television and film," said Fortress managing director Joshua Pack in a statement.
On the TV front, Revolution Studios has developed and produced syndicated series, including "Are We There Yet?" for TBS and "Anger Management," starring Charlie Sheen, with Lionsgate for FX and Drew Carey's "Improv-a-Ganza" for GSN.
"I'm excited for this next chapter for Revolution Studios and to continue doing what I love with the company--developing and producing projects," Roth said in a statement. "Revolution is in good hands under the leadership of Vince and Scott, who will grow the company with the backing of a sophisticated investor with deep experience in the industry."
Evolution Media Capital acted as the sell-side adviser in the transaction. O'Melveny & Myers served as legal advisers to Revolution together with general counsel Marla Levine who will continue in that capacity.
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