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BlackRock-backed HPS and Oaktree take control of Hollywood production supplier MBS
Private credit investors HPS Investment Partners and Oaktree Capital Management have taken control of MBS Group after the production equipment supplier defaulted on its debt, highlighting the mounting pressure on businesses tied to Hollywood’s prolonged slowdown, according to a report by the Financial Times.
The report cites unnamed people familiar with the transaction as revealing that the lenders, along with other creditors, assumed ownership of MBS last week after converting hundreds of millions of dollars of debt into equity. The restructuring also includes a further $40m of funding from creditors to support the company’s operations and help finance a return to growth.
HPS, which is part of BlackRock, and Oaktree are among the creditor group that now controls the business. MBS supplies lighting equipment and other production infrastructure to more than 600 sound stages worldwide, including New York’s Silvercup Studios and Los Angeles’ Television City.
The transaction ends the ownership of Hackman Capital Partners and Affinius Capital, which acquired MBS from Carlyle for $650m in 2019. Hackman Capital subsequently sought to integrate MBS with the sound stages it owned directly.
MBS has faced increasing financial pressure as major entertainment companies have reduced production spending since the streaming boom began to unwind. The resulting slowdown has affected a wide range of businesses supporting film and television production.
MBS and Hackman Capital had been working with restructuring adviser AlixPartners on cost reductions and a debt restructuring. Discussions around a potential recapitalisation began last year as the company grappled with its debt burden and wider financial pressures affecting its former owner.
MBS also faced complications relating to payments for services provided across Hackman Capital’s broader property portfolio. Hackman-owned venues account for about 14% of the sound stages serviced by MBS.
Source: Private Equity Wire