Hasbro will acquire eOne in an all-cash transaction valued at approximately $4.0 billion. Under the terms of the agreement, eOne shareholders will receive £5.60 in cash for each common share of eOne, which represents a 31 percent premium to eOne’s 30-day VWAP as of August 22.
“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,” said Brian Goldner, Hasbro chairman and CEO. “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.”
“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,” said Allan Leighton, eOne’s chairman of the board.
“Hasbro’s portfolio of integrated toy, game and consumer products, will further fuel the tremendous success we’ve achieved at eOne,” said Darren Throop, CEO of 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.”
The acquisition will advance Hasbro’s position as a leading global play and entertainment company, adding global preschool brands, such as Peppa Pig and PJ Masks, with proven success and strong financial returns across platforms to Hasbro’s portfolio. eOne’s production capabilities across platforms will also strengthen Hasbro’s end-to-end ability to monetize and bring to market its IP in increasingly attractive new formats, including OTT and premium platforms, music, location-based entertainment, AR and VR.
Enhances Hasbro’s brand portfolio with two global preschool brands and an attractive slate of brands in development
- The acquisition of highly profitable and merchandisable preschool brands is a strategic growth opportunity for Hasbro in the Infant and Preschool category, the largest super-category in the toy and game industry in the G11 markets, according to the NPD Group
- Peppa Pig is an evergreen property that has thrived for over a decade and extended itself to new profit streams that continue its success
- PJ Masks growth outlook is supported by new formats, its current rollout in China, the launch of new seasons in multiple regions, a live touring event and new toy lines
- A slate of additional brands is under development, including Ricky Zoom, a unique storyline with highly merchandisable content airing on Nickelodeon in the U.S. and other top-tier global networks beginning next month
Adding proven TV and film expertise
- By developing, owning and strategically distributing content, the acquisition positions Hasbro to capture more franchise economics created and perpetuated by differentiated platforms
- eOne brings profitable, growing capabilities in scripted and unscripted TV development and production for global audiences
- Live action and animation present multiple avenues to bring Hasbro’s franchises to life as OTT platforms and networks are increasingly interested in new, unexploited intellectual property while studios reclaim content for proprietary platforms
- In film, eOne has been transforming its business to focus on high-quality premium talent-driven content, including titles like Clifford the Big Red Dog and Monster Problems
- eOne’s Canadian TV and film operations will continue as a distinct Canadian-controlled business within the combined business
Creates opportunities for accelerating long-term profitable growth
- Hasbro expects to realize in-sourcing and other global annual run rate synergies of approximately US$130 million by 2022, driven by integration benefits, substantial savings from moving a significant portion of eOne’s toy business in-house and enhancing the profitability of eOne’s licensing and merchandising activities
- The addition of eOne to Hasbro is expected to be accretive to adjusted EPS in the first year following the transaction, adjusted to exclude one-time transaction costs and purchased intangible amortization, with mid- to high-teens accretion to adjusted EPS in the third full year following the closing of the transaction as synergies are achieved (1)
- Meaningful potential for additional revenue growth and expanded franchise economics with brand-driven animation and live action TV and film entertainment
For additional financial details on the acquisition, click here.