Paramount Global, run by the esteemed Shari Redstone, has just received a major boost in the form of a $125 million preferred equity investment from BDT Capital Partners. BDT is an affiliate of BDT & MSD Partners, a merchant bank that caters to family business owners and founders. This infusion of funds will help Paramount weather the storm of a difficult stock market environment. Although shares in Paramount are currently worth less than half of what they were at the time of the CBS and Viacom merger in 2019, they rose 5% in after-market trading on the news of the BDT stake.
Wall Street has been skeptical of Paramount’s recent spending on streaming, but the press release about the investment states that it will “position NAI for sustainable growth and further post-pandemic recovery in its underlying operations as movie theatre attendance continues to increase.” The specific goals include reducing interest expense and paying down a revolving loan and recent term loans. Once those facilities are retired, NAI shares in Paramount Global pledged to support those loans will be released back to NAI, and obligations to make future pledges under these facilities will be eliminated.
Shari Redstone, who is the non-executive chair of Paramount and president, CEO, and chair of NAI, expressed her excitement about the expanded partnership with BDT & MSD, saying, “Our expanded partnership with BDT & MSD reflects our strong belief in Paramount’s ability to deliver value to all shareholders. NAI has conviction in Paramount’s strategy and execution, and we remain committed to supporting Paramount as it takes the necessary steps to build on its success and capitalize on the strategic opportunities in our industry.”
Byron Trott, Chairman and Co-CEO of BDT & MSD Partners, also expressed his enthusiasm for the investment, saying, “We are pleased to partner with National Amusements in a transaction that supports its stewardship of Paramount Global. Paramount has an incredible legacy, underpinned by its industry-leading content and media assets. We believe strongly in the value creation opportunities ahead for the company and its shareholders.”
The investment is expected to close next week, subject to customary closing conditions.
