Market Insight

Kinepolis sets a second foot in the North American market with the acquisition of MJR

September 04, 2019

Pablo Carrera Pablo Carrera Principal Research Analyst, Cinema

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Belgian exhibitor group Kinepolis has announced a deal to acquire MJR Digital Cinemas with its 164 screens in the United States for an estimated $151.25m.

MJR Digital Cinemas is the 27th largest cinema chain in the US with ten sites, with between ten and twenty screens each. Almost all movie theatres are equipped with recliner seats, which have become a commodity in the North American cinema experience.

In 2013 it designed its Studio Bar, a full-service bar concept that is now on offer in nine of the ten locations. And in 2014 it developed its own PLF concept, the EPIC Experience with 4K and Dolby Atmos, installed in two screens.

This is the second acquisition of the Kinepolis Group in the North American market following the purchase of Landmark Cinemas in Canada with 303 screens in 2018 Q3. Since then, it has continued its expansion with the acquisition of NH Bioscopen chain in The Netherlands (19 screens) and two cinemas in Spain (totalling 38 screens).

The transaction is expected to close in October 2019 and, all things being equal, it will make Kinepolis the 14th largest group worldwide, excluding groups that operate solely in China (currently it is the 15th).


Our Analysis

The acquisition of Landmark two years ago was described as a foot in the door of the North American market for the Kinepolis group. MJR’s now provides the second foot with the addition of almost 20% screens to its footprint in an adjacent area to Canada, helping the integration.

Slowly but surely, Kinepolis has treaded with caution with the acquisition of Landmark, a large one for the size of the group (it added over 50% more screens), and it has taken two years to integrate both businesses before embarking into another large acquisition.

MJR brings with it seven owned cinemas (in Canada most of the sites are rented) leaving the group in a better real estate position and helping the profitability of the sites. In 2018 Landmark Theatres brought 26.7% of the revenues with a 37% share of the Group’s screens (as of end of year), leaving room for improvement of per-screen performance.

According to the management team, expansion is still a priority in the corporate agenda so more acquisitions are not ruled out.


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