RealD to go private in $551M deal

RealD Inc., which develops 3-D technology including projection systems used by cinemas around the world and which has a research-and-development center in Boulder, is being acquired by a private-equity investor in the media, entertainment and technology sector.

Los Angeles-based Rizvi Transverse Management LLC announced Tuesday that it is buying RealD (NYSE: RLD) in an all-cash merger transaction valued at approximately $551 million, including net debt.

Upon completion of the transaction, RealD will become a privately held company. The RealD board of directors approved the agreement, which still has to be voted on by shareholders at a meeting in February.

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Under the terms of the agreement, RealD shareholders will receive $11 in cash for each share of RealD’s common stock. This represents a premium of approximately 1 percent to RealD’s closing stock price on Oct. 1, 2014, the last unaffected trading day before Starboard Value LP announced it wanted to purchase all outstanding shares of RealD’s common stock.

Founded in 2003, RealD is headquartered in Beverly Hills, Calif., and has offices in London,  Moscow; Shanghai; Hong Kong and Tokyo. Its Boulder-based R&D moved in 2012 from 5335 Sterling Drive to a 64,425-square-foot space at 5700 and 5710 Flatiron Parkway. That decision to stay in Boulder earned the company an $80,000 rebate package from the city in 2013.

The company’s presence in Boulder began when it purchased ColorLink Inc. in 2007. ColorLink was cofounded by Gary Sharp, a University of Colorado Boulder engineering Ph.D., and Kristina Johnson, a CU engineering professor.

“Over the past year, the RealD board of directors, in consultation with its advisors, has engaged in a comprehensive review of strategic alternatives to enhance value for shareholders,” said Frank J. Biondi Jr., lead independent director of RealD, in a prepared statement. “This transaction with Rizvi Traverse concludes that review and provides immediate and substantial cash value to RealD shareholders at a significant premium to the company’s unaffected share price.”

“Since founding RealD in 2003, we have built the company into the world’s leading 3-D cinema platform, with over 27,000 worldwide screens,” added Michael V. Lewis, RealD’s chairman and chief executive. “I am excited about the future of RealD, where in partnership with Rizvi Traverse we can continue to maximize the value inherent in RealD’s cinema platform and leading IP portfolio. As a private company, RealD will have the flexibility and resources to further invest in our continued cinema leadership and visual-technology innovation.”

As part of the merger agreement, Lewis is to reinvest his equity into the transaction and vote his shares in favor of the merger. He will continue to serve in his current roles at RealD.

The transaction is expected to close in the fourth quarter of fiscal 2016 or shortly thereafter.

Moelis & Co. LLC is acting as sole financial adviser and Wachtell, Lipton, Rosen & Katz and Cooley LLP are acting as legal advisers to RealD’s board of directors. Freshfields Bruckhaus Deringer US LLP is acting as sole legal adviser to Lewis. Latham & Watkins LLP is acting as sole legal adviser to Rizvi Traverse.