Classic kids characters enlisted for U.S. foray
Entertainment Rights pays $210 mil"Lassie," "The Lone Ranger" and "Casper the Friendly Ghost" have joined forces with "Basil Brush" and "Postman Pat" in a £106.9 million ($210 million) deal that sees Entertainment Rights acquire Classic Media Holdings, it was announced Thursday.
Entertainment Rights, the British kids entertainment and character licensing venture, hopes the deal will give it a stronger foothold in the all-important U.S. market where Classic has 96% of its business. Entertainment Rights has been trying to build out its U.S. properties in recent years — "Postman Pat" airs on Nick Jr. — but last year only 8% of its revenue came from the U.S.
It will be able to leverage Classic's existing relationships with broadcasters and retailers to grow its North American operations.
Entertainment Rights will pay £86.5 million ($170 million) in cash and will issue new shares to the value of £20.4 million ($40 million) to finance the deal.
The acquisition of Classic will create a transatlantic kids venture boasting such properties as "Dick Tracy," "Rudolph the Red-Nosed Reindeer" and "She Ra" as well as a library of 8,700 hours of programming.
Entertainment Rights CEO Mike Heap said the deal will be transformational.
"Looking at the two businesses, they are virtually mirror images of each other," he said. "We will be able to take our businesses into the U.S. and we will be able to take their business international."
Heap said the deal will be earnings-enhancing in the first financial year.
"We know the business very well and know the people well and the brand well, so the integration period will be done in three to four months' time."
The acquisition is subject to shareholder approval at a meeting called for Jan. 8.