Hasbro buys Entertainment One in $4bn all-cash transaction

Toy giant Hasbro is buying Canada-born, London Stock Exchange-traded Entertainment One in an all-cash transaction valued at approximately £3.3 billion ($4bn).

The acquisition adds eOne-owned properties such as “evergreen” preschool brand Peppa Pig as well as PJ Masks to Hasbro’s portfolio, in addition to brands under development, such as Ricky Zoom, which airs in September.

Under the terms of the agreement, eOne shareholders will receive £5.60 ($6.80) in cash for each common share of eOne, which represents a 31% premium to eOne’s 30-day volume weighted average price (VWAP) as of Thursday, August 22, 2019.

The press release issued to announce the news when the market closed yesterday (August 22) stated that eOne brings “profitable, growing capabilities in scripted and unscripted TV development and production for global audiences”.

While the press release briefly mentions music in an overview section of the type of content that Entertainment One works with, eOne Music, run by Global President of Music Chris Taylor (pictured main), didn’t specifically get a mention.

eOne’s music revenues were up 30% to £64.4 million ($78.7m), or 6.8% of its total FY revenue of £941.2m ($1.15bn), according to the company’s most recent full year financial results.

Entertainment One recently entered into an agreement to acquire UK-based Audio Network Limited (Audio Network) in a deal valued at approximately $215m and works with likes of The Lumineers, Wu-Tang Clan and guitar legend Zakk Wylde amongst many others, in addition to operating successful live events, publishing, licensing and talent management businesses.

The announcement also stated that “top”, but unnamed eOne executives have agreed to join the Hasbro team.

Hasbro says that it expects to finance the $4bn transaction with the proceeds of debt financing and approximately $1bn to$1.25bn in cash from equity financing.

The toy maker added that 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.

“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.”

Brian Goldner, Hasbro 

Brian Goldner, Hasbro chairman and Chief Executive Officer said: “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.

“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 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.”

“This transaction creates significant, immediate value for our shareholders as it recognizes the strength of our future-facing business model.”

Allan Leighton, eOne

Allan Leighton, eOne’s Chairman of the board 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 recognizes the strength of our future-facing business model.”

“Hasbro’s portfolio of integrated toy, game and consumer products, will further fuel the tremendous success we’ve achieved at eOne.”

Darren Throop,  eOne

Darren Throop, Chief Executive Officer of eOne said: “Hasbro’s portfolio of integrated toy, game and consumer products, will further fuel the tremendous success we’ve achieved at eOne.

“There’s a strong cultural fit between our two companies; eOne’s stated mission is to unlock the power and value of creativity which aligns with Hasbro’s corporate objectives. eOne teams will continue to do what they do best, bolstered by the access to Hasbro’s extensive portfolio of richly creative IP and merchandising strength.

“In addition, the resulting expanded Hasbro presence in Canada through eOne’s deep roots will bring world class talent and production capabilities to Hasbro. Along with our leadership team, I look forward to working with Hasbro on our joint growth and success for many years to come.”

“By combining two profitable and financially disciplined companies we expect to unlock value in the short- and long-term for our stakeholders.”

Deborah Thomas, Hasbro

Deborah Thomas, Hasbro’s chief financial officer: “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.”Music Business Worldwide

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