Apollo Global Management Inc. APO 2.70% is buying a minority stake in Legendary Entertainment, the latest in a series of deals struck by Hollywood firms cashing in on the growing demand for streaming content.
Apollo, a private-equity firm, said Monday it agreed to pay $760 million for its stake in Legendary Entertainment, the Burbank, Calif.-based company that has backed such movies as “Dune,” “Jurassic Park” and “The Dark Knight.”
The companies declined to provide a valuation for Legendary Entertainment.
Dalian Wanda Group Co., the Chinese conglomerate that owns Legendary Entertainment, will retain a majority stake, according to people familiar with the matter. As part of the deal, operational control of Legendary Entertainment will shift to executives at Legendary, according to a person familiar with the deal.
Hollywood has been a hotbed for deal making in recent months. Candle Media, a media company backed by private-equity firm Blackstone Inc., has paid to acquire ownership interests in Hello Sunshine, the media company founded by actress Reese Witherspoon, Westbrook Inc., the production company co-founded by actors Will Smith and Jada Pinkett Smith, and Moonbug Entertainment, the company behind children’s franchise “CoComelon.”
Aaron Sobel, a partner at Apollo, said in an interview that the private-equity firm’s investment in Legendary is part of a broader bet on the increasing value of quality content in the coming years.
“Good content matters way more,” Mr. Sobel said. “The cream rises to the top, and these guys have demonstrated their ability to do that.”
Mr. Sobel said Legendary Entertainment was appealing to Apollo because of its profitability, though he declined to provide specific figures. Apollo generally focuses on profitable assets in the media sector, including its 2021 purchase of Yahoo for $5 billion.
Legendary Chief Executive Joshua Grode said in an interview that the deal would allow the company to take advantage of the booming market for movies and TV shows.
“Having a company like Apollo as a major investor gives us the financial firepower to really grow the business,” Mr. Grode said.
Write to Benjamin Mullin at [email protected]
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