Lionsgate Buys 'Twilight' Studio for $412.5M

Santa Monica-based Lionsgate completed its purchase of Twilight production house Summit Entertainment in a cash-and-stock deal worth $412.5 million, the companies announced Friday.

Summit's Twilight franchise has grossed more than $2.5 billion worldwide since the first movie blew out of the gates in late 2008, and hordes of fans of the Stephenie Meyer books rushed to theaters. The finale of the five-movie juggernaut, The Twilight Saga: Breaking Dawn Part 2, is due out in November.

Meanwhile Lions Gate Entertainment Corp. plans to kick off its own four-part series based on Suzanne Collins' young adult novels, The Hunger Games, beginning in March. The three books in the trilogy are ranked 1, 2 and 3 on USA Today's best-seller list and there are about 23 million books in print.

Combined, the studios hope to reap the benefits of selling to similar audiences.

"They have a tremendous outreach with fans and the ability to reach them through email, Facebook, et cetera," said Lions Gate CEO Jon Feltheimer. "Starting right now, today, we are going to utilize that institutional knowledge to move Hunger Games ahead even more quickly."

The purchase was funded largely with Summit cash, along with $55 million of Lionsgate cash, $45 million from newly issued Lionsgate convertible notes, $50 million of Lionsgate stock and another $20 million in cash or stock to be issued at Lionsgate's option within 60 days.

"The privately owned studio ended up a takeover target since it was sitting on so much cash," Nikki Finke of deadline.com reported Friday.

Finke goes on to say that now is the "right time for everyone connected with Summit to score a windfall" with the the wildly successful Twilight Series drawing to a close.

Summit was also the company behind films such as Red, 50/50, Source Code and last year's Oscar-winning The Hurt Locker.

Lionsgate is the production house behind television series including Mad Men, Weeds and Nurse Jackie, and films such as The Lincoln Lawyer, The Expendables, Precious and Tyler Perry's films.

"We are uniting two powerful entertainment brands, bringing together two world-class feature film franchises to establish a commanding position in the young adult market, strengthening our global distribution infrastructure and creating a scalable platform that will result in significant and accretive financial benefits to Lionsgate shareholders," Lionsgate Co-Chairman and CEO Jon Feltheimer and Vice Chairman Michael Burns said.

— The Huffington Post contributed to this report