Tull gets control of Legendary Pictures in buyout of original investors
The chairman of the film financing and production company has quietly led a buyout of its original investors in order to more directly steer an expansion into video games, digital media and other businesses.
Under the deal that closed last week, Tull brought on two new investors to acquire nearly all the stake held by Legendary's original investors who backed the company's founding in 2004, according to several people familiar with the situation.
A representative for Legendary declined to comment.
The transaction resulted in Tull becoming Legendary's single largest controlling shareholder, making it easier for him to grow the company beyond its current business of co-financing films with Warner Bros. Tull hired former Electronic Arts executive Kathy Vrabeck last year to lead Legendary's digital business and previously weighed buying video game developer Epic Games, but has yet to make a major move in the area.
Legendary's new backers are Fidelity Investments and Fortress Investment Group, one person close to the deal said. Fortress was part of an unsuccessful bid earlier this year with Ron Burkle and Bob and Harvey Weinstein to acquire Miramax Films from Walt Disney Co.
Fidelity and Fortress, along with Tull, acquired the stakes held by Abry Partners, AIG Direct Investments, Bank of America, Columbia Capital, Falcon Investment Advisors and M/C Venture Partners. Those original partners had invested about $400 million in equity into Legendary at a time when it was focused purely on financing movies.
They sold their stakes at a profit, people close to the situation said. In a document posted on its website, M/C Venture Partners reported "a very successful exit" in the deal.
Unlike other private equity-backed film investment companies that have struggled, Legendary has been associated with several very successful pictures, including "The Dark Knight," "The Hangover" and "Inception," although it has had some flops, such as this summer's "Jonah Hex."
At the time that the buyout closed last week, Legendary also closed a strategic partnership with Hong Kong company Orange Sky Golden Harvest Entertainment in order to explore business opportunities in China. Orange Sky also invested $25 million, which Legendary used for a small portion of the buyout.
The company didn't disclose the buyout of its original investors last week. A representative said that Legendary doesn't discuss private financial matters.
Specific financial details of the buyout were not available, but people familiar with the matter said Legendary is now valued at more than $1 billion.
The company's deal to co-finance movies with Warner Bros. lasts until 2013.
-- Ben Fritz
Photo: Legendary Pictures' chairman, Thomas Tull, and digital president, Kathy Vrabeck. Credit: Bob Chamberlin / Los Angeles Times