DHX Media buys kids' entertainment powerhouse Cookie Jar in $111M deal
Michelle Clancy | 20-08-2012
DHX Media will acquire Cookie Jar Entertainment in a $111 million deal that will create expanded digital distribution opportunities for the world's most extensive independent library of children's entertainment, including well-known favourites like Caillou, Johnny Test and Inspector Gadget.
Cookie Jar is also the No. 1 supplier of kids' programming to online content provider Netflix, and has relationships with Amazon, Comcast, DISH, Hulu, Netflix, Samsung, Telmex and Vivendi.
"The acquisition of Cookie Jar is a transformational event for DHX that will significantly enhance our scale and our growth opportunities," said Michael Donovan, CEO of DHX. "Through this combination, we will strengthen our portfolio of brands, global reach, management depth and our position in the rapidly emerging digital distribution channels to become the market leader."
The combined company will own more than 8,550 half-hour episodes, increasing DHX's current content library of children's programming by a factor of more than three times, from approximately 2,550. It also expands merchandising, third-party brand management and licencing opportunities to expand accordingly.
"Families are increasingly accessing children's entertainment from sources other than traditional television and DVD sales," Donovan said during a earlier conference call.
Cookie Jar has experienced significant growth in digital distribution, growing revenue from that channel to $8 million in the 12 months ending 31 May, 2012. That represents a growth rate of 353%.
"There is an insatiable appetite for kids content in the new digital streaming universe and we are very well positioned with our extensive library of evergreen, popular and recognizable brands to satisfy the market demand," Cookie Jar CEO Michael Hirsh said in a statement.
Over the same 12-month period, Cookie Jar had total revenue of $56.7 million and EBITDA of $12.6 million. By combining operations of the two companies, DHX expects to realize cost synergies of at least $8 million annually which should be achieved within the first year following the closing of the transaction, it said.