Our rating on British Columbia-domiciled and Santa Monica, Calif.-headquartered movie and TV studio Lions Gate Entertainment Corp. reflects the consolidated company's "weak" business risk profile and its "highly leveraged" financial risk profile (based on our criteria). Pro forma for the acquisition of Summit Entertainment LLC, the company would have ranked seventh in domestic box office in 2011, with a 5.8% share. In our view, the acquisition modestly improves Lions Gate's business risk profile, which we previously regarded as "vulnerable." The acquisition increases the company's creative capabilities and could add to its leverage over exhibitors if stronger intermediate-term film performance continues over the long term. Still, the company remains subject to the volatile nature of cash flows in the film industry,...
Companies mentioned in this report are:
- Lions Gate Entertainment Corp.
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