Entertainment One eyes Canadian listing
E1 in reverse takeover of DHX Media for $65.7 milTORONTO -- Canadian distributor Entertainment One on Monday unveiled a reverse takeover of rival DHX Media in a bid to secure a coveted listing on the Toronto Stock Exchange.
E1, which already trades on Britain's AIM market, will pay about CAN$68 million ($65.7 million), or CAN$1.59 ($1.54) per share, for Halifax-based DHX Media.
Subject to shareholder and regulatory approval, the completed deal will see E1 CEO Darren Throop remain in the top post at the combined company, while "key members" of DHX's senior management team will stay with the firm as part of its newly minted TV division.
In July, E1 got into TV production as it acquired rival Canadian producers Blueprint Entertainment and Barna-Alper Prods. along with distributors Oasis International and Maximum Films.
E1, which is backed by London-based equity player Marwyn Investment Management and trades on Britain's AIM market, also purchased British distributor Contender Entertainment and Benelux distributor RCV last year as its builds out a multiterritory distribution network in Europe.
DHX Media, led by founder and CEO Paul Donovan, produces and distributes live-action and animated kids programming and serves an international market that includes Nick Jr., Cartoon Network, Disney and Canal J.
The target company's main assets include Toronto-based Decode Entertainment, Nova Scotia-based Halifax Film and Vancouver-based Studio B Prods.
DHX brings a catalog of about 60 TV series including "The Guard," "This Hour Has 22 Minutes," "Franny's Feet," "Poko" and "Martha Speaks."
Donovan launched DHX Media after the 2001 sale of his production shingle Salter Street Films to Alliance Atlantis Communications for CAN$80 million.
Alliance Atlantis initially absorbed Salter Street into its TV division before it closed the operation in 2003. That led Donovan to launch Halifax Film, which eventually morphed into the publicly traded DHX Media after a string of acquisitions.
Among Donovan's credits at Salter Street was Michael Moore's Oscar-winning documentary "Bowling for Columbine."
As it acquires a TSE listing, Entertainment One also is eyeing a move of its U.K. listing to the main market of the London Stock Exchange.
Donovan will leave DHX Media, with the possibility of a first-look deal with E1 for his film and TV product down the road.
Donovan said he felt it necessary to merge DHX Media with an eye toward surviving amid the current credit crunch in financial markets.