Comprehensive M&A data with integrated detailed company information

Hasbro expanding portfolio with USD 4bn deal for eOne
Posted on Friday, 23 August 2019 09:33
Toy manufacturer Hasbro has agreed to acquire children’s television show creator Entertainment One (eOne) for GBP 3.30 billion, or the equivalent to USD 4.00 billion, to expand its storytelling capabilities through global entertainment.

Under the terms of the transaction, the buyer is offering GBP 5.60 in cash for every share held in the target, representing a premium of 28.0 per cent on the close of GBP 4.38 on 21st August 2019, the last trading day prior to the announcement.

Stocks in eOne rose 29.5 per cent to GBP 5.74 at 09:16 today, giving the business a market capitalisation of GBP 2.85 billion.

The deal boosts Hasbro’s strategy by adding popular content such as Peppa Pig and PJ Masks to its portfolio, while also enhancing its television and film strengths.

Combined, the company will be in a better position to drive revenue and profit over the media term, while the buyer remains committed to returning gross debt to earnings before interest, taxes, depreciation and amortisation (EBITDA) between 2.0x and 2.50x.

In addition, the acquiror expects to realise global annual run rate synergies of about USD 130.00 million by 2022.

Hasbro expects to finance the deal with proceeds from debt funding and between USD 1.00 billion to USD 1.25 billion in cash from equity capital.

Bank of America Merrill Lynch has committed to providing a 364-day senior unsecured bridge loan facility to secure the purchase price.

Closing is subject to regulatory, shareholder and court approvals and is expected to complete in the fourth quarter of 2019.

eOne has made headlines as a potential acquisition target for over three years, with potential suitors such as private equity firm KKR & Co and UK-based television broadcaster ITV being named.

The company claims to be a global independent studio that provides leading entertainment content, with a library worth over USD 2.00 billion and including 80,000 hours of film and television and 40,000 music tracks.

In the year ended 31st March 2019, eOne generated revenue of GBP 941.20 million, down 8.6 per cent from GBP 1.03 billion in the previous 12 months.

EBITDA jumped 20.8 per cent to GBP 197.60 million in FY 2019 (FY 2018: GBP 163.60 million).

© Zephus Ltd