Act III Theatres was an American company that owned movie theater multiplexes and screens principally located in the

U.S. state In the United States, a state is a constituent political entity, of which there are 50. Bound together in a political union, each state holds governmental jurisdiction over a separate and defined geographic territory where it shares its sove ...

s of

Texas Texas (, ; Spanish: ''Texas'', ''Tejas'') is a state in the South Central region of the United States. At 268,596 square miles (695,662 km2), and with more than 29.1 million residents in 2020, it is the second-largest U.S. state by ...

Oregon Oregon () is a state in the Pacific Northwest region of the Western United States. The Columbia River delineates much of Oregon's northern boundary with Washington, while the Snake River delineates much of its eastern boundary with Idaho. T ...

and

Washington Washington commonly refers to: * Washington (state), United States * Washington, D.C., the capital of the United States ** A metonym for the federal government of the United States ** Washington metropolitan area, the metropolitan area centered o ...

. The company was in business from 1986 to 1997, when it was sold to

Kohlberg Kravis Roberts KKR & Co. Inc., also known as Kohlberg Kravis Roberts & Co., is an American global investment company that manages multiple alternative asset classes, including private equity, energy, infrastructure, real estate, credit, and, through its strate ...

(KKR). Television producer Norman Lear owned a controlling stake in Act III Theatres through his company

Act III Communications Act III Communications is a media and entertainment company owned by TV producer Norman Lear. It was started in 1985 following Lear's sale of Embassy Communications to The Coca-Cola Company. In a Wall St. Journal interview in 1988, Lear explaine ...

. At the time of sale in 1997, Act III Theaters consisted of 124 multiplex theaters operating 793 screens located primarily in

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and Austin, Texas and

Portland, Oregon Portland (, ) is a port city in the Pacific Northwest and the list of cities in Oregon, largest city in the U.S. state of Oregon. Situated at the confluence of the Willamette River, Willamette and Columbia River, Columbia rivers, Portland is ...

, and was the tenth-largest chain of cinemas in the United States.

Formation of Act III Theatres

Act III Theatres was launched in 1986 with the acquisition of

Santikos Theatres Santikos Entertainment (formerly Santikos Theatres) is an American movie theater and entertainment center chain based in San Antonio, Texas. The company was founded in 1911 by Greek entrepreneur Louis Santikos and was owned and operated by his son ...

in San Antonio. Scott C. Wallace, then a senior executive at

AMC Theatres AMC Entertainment Holdings, Inc. (d/b/a AMC Theatres, originally an abbreviation for American Multi-Cinema; often referred to simply as AMC and known in some countries as AMC Cinemas or AMC Multi-Cinemas) is an American movie theater chain fou ...

, brought the idea to Act III Communications' president Tom McGrath, having received a waiver from his current employer to pursue the transaction. The group expanded in 1988 by acquiring Luxury Theaters in Portland from

Tom Moyer Thomas P. Moyer (March 2, 1919 – November 28, 2014) was an American movie theater chain magnate, real estate developer, and philanthropist from Oregon. Moyer was known for his lightweight boxing career, his career in entertainment, and for de ...

. Luxury Theaters consisted of 87 cinemas operating 293 screens. The purchase price was $150 million. Subsequent to the acquisition of Luxury Theaters, the company's headquarters was relocated from San Antonio to Portland. Other chains acquired by Act III included Presidio Theaters in Austin. Following the acquisition of Presidio, Act III consolidated its market position by buying AMC's theaters in Austin, creating the dominant theater circuit in that city. To grow its footprint in the

Pacific Northwest The Pacific Northwest (sometimes Cascadia, or simply abbreviated as PNW) is a geographic region in western North America bounded by its coastal waters of the Pacific Ocean to the west and, loosely, by the Rocky Mountains to the east. Tho ...

, Act III acquired Oregon and Washington theaters then owned by Cineplex Odeon.

Acquisition by KKR

KKR acquired Act III Theatres in October 1998 for $323 million plus the assumption of $338 million in debt. The price represents and estimated 11.2x trailing cash flow and 8.8x pro forma cash flow. EBITDA for the group was $59 million for the 12 months ended December 31, 1996. At 11.2x trailing earnings, the acquisition of Act III represented one of the highest valuations ever paid for a chain of movie theaters. Later in 1998, KKR combined its theater operations with the United Artists Theatres held by

Hicks Muse HM Capital Partners was a private equity firm in the United States that specialized in leveraged buyouts. The firm was previously known as Hicks, Muse, Tate & Furst. It was founded in 1989 by Tom Hicks and John Muse as Hicks, Muse & Co. and was ...

and together they acquired

Regal Cinemas Regal Cinemas (also Regal Entertainment Group) is an American movie theater chain headquartered in Knoxville, Tennessee. A division of Cineworld, Regal operates the second-largest theater circuit in the United States, with over 7,200 screens i ...

, creating what is today the largest chain of cinemas in the United States (which operates under the Regal name). In 1990, during the height of the 1990–92 recession, Boston Ventures placed a value on Act III Theatres of 4-5x cash flow while advising majority owner Norman Lear. Simultaneously, Boston Ventures was seeking to acquire various Act III assets. "Getting it on in Act III" Variety October 16, 1997
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References

{{Reflist Former cinemas in the United States Defunct companies based in Oregon Defunct companies based in Texas Movie theatre chains in the United States 1986 establishments in the United States