Hasbro has announced this morning that it will acquire Canadian group, Entertainment One for £3.3bn in cash.
It comes just a month after eOne bought Leeds-based indie, Daisybeck Studios to increase its non-scripted activity.
The reason for Hasbro’s interest is that eOne also holds the rights to preschool brands, Peppa Pig and PJ Masks, as well as a slate of additional brands in development, including Ricky Zoom.
“The acquisition of eOne adds beloved story-led global family brands that deliver strong operating returns to Hasbro’s portfolio and provides a pipeline of new brand creation driven by family-oriented storytelling, which will now include Hasbro’s IP,” said Brian Goldner, Hasbro Chairman and Chief Executive Officer.
“In addition, Hasbro will leverage eOne’s immersive entertainment capabilities to bring our portfolio of brands that have appeal to gamers, fans and families to all screens globally and realise full franchise economics across our blueprint strategy for shareholders. We are excited to welcome eOne’s talented employees from around the world into the Hasbro family.”
Hasbro stated that eOne’s Canadian TV and film operations will continue as a distinct Canadian-controlled business and that its “top executives” would remain with the business.
“On behalf of the board of eOne, I am very pleased by this exciting development, which is a testament to eOne management’s vision, leadership and solid execution. This transaction creates significant, immediate value for our shareholders as it recognises the strength of our future-facing business model,” said Allan Leighton, eOne’s Chairman of the Board.
Deborah Thomas, Hasbro’s Chief Financial Officer added:
“By combining two profitable and financially disciplined companies we expect to unlock value in the short- and long-term for our stakeholders.
“eOne’s brands and TV and film expertise, together with Hasbro’s brands, toy and game innovation and licensing capabilities, positions us to more quickly drive revenue and profit over the medium-term. We remain committed to maintaining an investment grade rating and returning to our gross Debt to EBITDA target of 2.00 to 2.50X.”
Hasbro said that it expects to finance the transaction with the proceeds of debt financing and approximately US$1.0 billion to US$1.25 billion in cash from equity financing. It has entered into a debt commitment letter with Bank of America Merrill Lynch to provide a 364-day senior unsecured bridge loan facility to secure funding of the purchase price.