Lionsgate is set to buy Hasbro’s Entertainment One film and TV business for $500 million under a deal unveiled Thursday.
The price tag consists of $375 million in cash, subject to certain purchase price adjustments, and the assumption of production financing loans, the companies said before the stock market open. “The transaction has been approved by both companies’ boards of directors and remains subject to customary closing conditions, including the receipt of regulatory approvals.” The deal is expected to close by the end of 2023.
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The sale covers a content library of “nearly 6,500 titles, active productions for non-Hasbro owned IP like The Rookie, Yellowjackets and Naked and Afraid franchises, and the eOne unscripted business, which will include rights for certain Hasbro-based shows like Play-Doh Squished,” the companies said. “The eOne film and TV business being sold also includes Hasbro’s interest in the Canadian film and TV operations of Entertainment One Canada Limited.” The eOne branded film business has also produced and financed such movies as as Dungeons & Dragons: Honor Among Thieves and The Woman King.
“The acquisition of eOne checks off all the boxes in areas that play to our core strengths,” said Lionsgate CEO Jon Feltheimer. “It will be immediately and highly accretive, adds a world-class library with thousands of properties, strengthens our scripted and unscripted television business and continues to expand our presence in Canada and the U.K. The deal is the culmination of our long-standing relationship with the immensely talented team at eOne, and it continues to build our position as one of the world’s leading independent content platforms with a stockpile of great intellectual properties and a unique, non-replicable portfolio of assets.”
In November, Hasbro had announced that it was putting eOne up for sale and retained J.P. Morgan and Centerview Partners to assist with the sale process. In 2019, the toy maker acquired the Toronto-based studio, which houses most of its entertainment assets.
The sales process was jump-started by eOne founder Darren Throop announcing he would finish out his employment contract and then leave the company at the end 2022. But Throop wasn’t long in seeking financing from CVC Capital Partners, a Luxembourg-based private equity firm with other media interests, to possibly buy the film and TV production and distribution unit back from Hasbro.
Hasbro acquired eOne in 2019 as part of a $4 billion all-cash transaction. At the time, Hasbro looked to the eOne deal to build the toy maker into a media contender as it combined the indie studio’s film and TV unit with its own.
The pandemic disrupted that media strategy with a Hollywood production shutdown and delays in content deliveries as the industry reopened. More recently, Hasbro, under newly installed CEO Chris Cocks, has turned its focus to becoming a digital gaming powerhouse after fending off a proxy battle with an activist investor, Alta Fox Capital Management.
After selling off the eOne division, Hasbro is looking to reinvest in fewer, more profitable properties, and to do so with outside partners to reduce costs and risk. “This sale fully aligns with our strategy, and we are pleased to bring the process to a successful close,” said Cocks. “Lionsgate’s management team is experienced in entertainment and adept at driving value, and we’re glad to have found such a good home for our eOne film and TV business.”
Jefferies & Co., Ernst & Young and Sheppard Mullin advised Lionsgate on the transaction. J.P. Morgan and Centerview Partners served as lead financial advisors to Hasbro. Cravath, Swaine & Moore LLP, Mayer Brown International LLP and Stikeman Elliott LLP are acting as legal counsel to Hasbro, with Osler, Hoskin & Harcourt LLP acting as legal counsel to Entertainment One Canada.
