Legendary Entertainment Buys Out Wanda, With An Eye Toward M&A

Legendary Entertainment is making a big strategic move, buying out Dalian Wanda Group’s stake in the company.

In an interview with The Hollywood Reporter, Legendary CEO Josh Grode framed the deal as being a “right place, right time” situation.

“Wanda was looking for some liquidity in some of its investments. And we are coming off a great first part of the year, we had a very strong 2023, so we have significant excess liquidity on our balance sheet,” Grode says. “After six months or so of talking about it, we were able to reach terms that we thought were good, and the transaction winds up being very accretive to both management and Apollo, which, after the transaction is over, we will own the business roughly equally.”

Terms of the deal were not disclosed, but the company said that it financed the buyout “via cash on its balance sheet without outside financing, and with the company still retaining significant excess liquidity after the transaction to finance its current business and planned expansion.”

Wanda acquired Legendary in a deal that valued the studio at $3.5 billion back in 2016, though the private equity firm Apollo would go on to acquire a $760 million minority stake in 2022, buying out a portion of Wanda’s ownership in the company.

“We are thrilled to expand our relationship with Legendary and further support Josh and Mary [Parent] and the incredibly talented team,” said Apollo partners Aaron Sobel and Lee Solomon in a statement. “We continue to see Legendary as an outstanding platform for future growth that is well positioned to thrive as the entertainment industry continues to evolve.”

Legendary’s board will be reconstituted to be evenly split between management and executives from Apollo.

“This transaction was very accretive for all of us, and so we think we bought it out at a very good price,” Grode says.

The buyout comes amid a banner year for the company, with two of its films Dune: Part Two and Godzilla X Kong: The New Empire earning nearly $1.3 billion at the global box office. Upcoming projects include video game adaptations based on the Minecraft and Street Fighter franchises, as well as an upcoming Denis Villeneuve film and untitled Alejandro G. Iñárritu film starring Tom Cruise.

“Success doesn’t come from one place, it comes from everybody working, you know, in unison to achieve a common goal,” Grode says, praising the work of Legendary’s creative team led by Mary Parent, and the company’s partners at Warner Bros. “That’s really what this is, it’s the result of a lot of people’s hard work over the years.”

Grode indicated that while the creative engines of the company will not change, one major benefit of buying out Wanda is that Legendary will have more flexibility to pursue major M&A deals.

“We had management control and we had creative control before the deal, so nothing really changes on that front,” he says. “I think probably the only thing that maybe is no longer there, is when we would have conversations around large scale M&A, we would have to deal with the foreign ownership issue, and that’s now no longer an issue.”

Legendary, founded by Thomas Tull in 2000, has leaned on its ability to work with established intellectual property and major studios in its projects, as is apparent with its involvement with films spanning Godzilla and Dune to Jurassic World and Warcraft.

Now, led exclusively by its management team with support from Apollo, Legendary will pursue its film and TV strategy while also seeking other growth avenues. It should be noted that last year Legendary secured an $800 million credit facility with JPMorgan.

“We’re now in a position where we have a significant ownership stake in the business, we have a lot of excess liquidity in the business,” Grode says. “We think that there’s an opportunity to continue to create great content, both film and television, and to expand what we’ve been doing in those areas. Not that we couldn’t do it before, but we now can do it through organic growth and through M&A.