Hasbro has entered into a definitive agreement to acquire the London-based company Entertainment One in an all-cash transaction worth $4 billion.
Also know as eOne, the entertainment company has made a name for itself through products like Peppa Pig, the popular children's character (among others, such as PJ Masks and Ricky Zoom) and Marion "Suge" Knight's Death Row Records, which produced albums for Tupac and Dr. Dre.
A press release outlines numerous advantages to the move, citing everything from new access to "highly profitable and merchandisable preschool brands" and "exceptional, proven TV and film expertise," to the leverage of a "talented executive team ... [with a] strong Canadian presence" and establishing "opportunities for accelerating long-term profitable growth."
Hasbro CEO Brian Goldner explained further.
“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,” he said. “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.”
Allan Leighton, chairman of eOne's board, echoed Goldner's sentiment.
“This transaction creates significant, immediate value for our shareholders as it recognizes the strength of our future-facing business model,” he said.
A CNN report added that the deal is expected to close by the end of 2019, subject to regulatory approvals. Additionally, an unnamed group of "top eOne executives" will join Hasbro.
The move is not the first of its "creative new deals" for the company following the end of Toys "R" Us. Consider its June-announced Netflix partnership, which will result in a "Magic: The Gathering" animated series (the card game is owned by Hasbro), CNN reports.
While the deal appears straightforward, other outlets are examining how Hasbro has access to eOne's more adult music and film offerings; as aforementioned, Death Row Records is one of the company's properties, and it also owns shows like "The Walking Dead."
Yahoo Finance reports that eOne is "one of the largest independent publishers in the music business, working with scores of top artists."
As for what the typically family-friendly Hasbro will do with those elements of eOne's portfolio remains to be seen, Goldner said.
“We'll wait until the deal closes over the next few months, and then take a good look with management about where we want to go. We like the music business. Everybody's using music. We use a ton of music between our advertising, our television, our films," he told Yahoo Finance. "Other people in video are using a lot of music. It's a very profitable part of their business. It's a smaller part of their business. I want to look at everything before we decide which pieces we lean into and which pieces might be available to not lean into."
