eOne brands such as Peppa Pig, PJ Masks and Ricky Zoom will join Hasbro, in an all-cash transaction which has been valued at $4b.
In a move set to further develop Hasbro’s film and TV credentials, which the company has recently developed through franchises such as Transformers, top eOne executives will join the Hasbro team. Meanwhile, eOne’s Canadian TV and film operations will continue as a distinct Canadian-controlled business within the combined entity.
In a conference call with investors, Hasbro CFO Deborah Thomas said the companies have identified about $130m in cost synergies by 2022, achieved by a series of measures including bringing licensing activities in-house. CEO Brian Goldner said the $130m is cost savings only, not revenue opportunities. Under the deal, eOne shareholders will receive $6.86 in cash for each common share of eOne, which is a 31% premium to eOne’s current 30-day volume weighted average price
“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 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 realize 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.”
Allan Leighton, director at eOne added: “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.”
Hasbro said it expects to suspend its current buyback program as part of the purchase, which was approved by both boards and is expected to close during the fourth quarter.