Alliance Entertainment Wins Bid to Acquire Key Assets from Diamond Comic Distributors

Rhea-AI Summary

Alliance Entertainment (NASDAQ: AENT) has won the bid to acquire key assets from Diamond Comic Distributors through a court-supervised bankruptcy process. The acquisition includes Diamond Comic Distributors (U.S.), Alliance Game Distributors, Diamond Select Toys & Collectibles, and Collectible Grading Authority.

The acquired assets are projected to generate over $200 million in revenue and $10 million in EBITDA by FY2026. The businesses support over 5,000 retail storefronts and provide access to the $50+ billion global market for tabletop games, collectibles, comics, and pop culture merchandise.

Alliance Game Distributors offers 15,000+ unique SKUs to 3,000+ independent retailers, while Diamond Comic Distributors serves 2,500+ comic shops. Collectible Grading Authority has authenticated over 500,000 collectibles across 50+ countries.

The transaction will be financed through an amended $160 million Revolving Credit Facility, up from $120 million, and is expected to close in April 2025, subject to bankruptcy court approval.

Positive

• Expected revenue generation of $200M+ and $10M+ EBITDA by FY2026
• Access to 5,000+ retail storefronts and $50B+ global market
• Immediate cross-selling opportunities across mass retail and specialty channels
• Acquisition of exclusive titles and partnerships with major gaming/comic brands
• Expansion into high-margin collectibles grading services

Negative

• Acquisition subject to bankruptcy court approval
• Increased debt through expanded credit facility ($160M from $120M)
• Integration risks with bankrupt assets
• Execution risk in realizing projected revenue and EBITDA targets

Insights

Financial Analyst

Alliance Entertainment's acquisition of Diamond Comic Distributors' assets represents a transformative transaction with compelling financial and strategic merits. The acquired businesses are projected to contribute $200 million in revenue and $10 million in EBITDA by FY2026, substantial figures relative to AENT's current $198.7 million market capitalization.

The bankruptcy court acquisition structure likely enables AENT to secure these established businesses at an attractive valuation. While the exact purchase price isn't disclosed, the $40 million expansion of their credit facility provides some indication of the transaction's scale. This financing approach leverages existing debt capacity rather than diluting shareholders.

The strategic rationale centers on three value drivers: product portfolio expansion, customer base diversification, and operational synergies. By adding 15,000+ SKUs and relationships with 5,000+ retail storefronts, AENT gains immediate scale. More importantly, the cross-selling potential between mass retailers and specialty channels creates a compelling revenue growth narrative.

The collectibles and tabletop gaming markets typically command higher margins than traditional media distribution, potentially enhancing AENT's profitability profile. The addition of Collectible Grading Authority introduces a high-value service component that could further strengthen margins.

While integration risk exists when acquiring businesses from bankruptcy proceedings, the complementary nature of these assets and AENT's distribution expertise should facilitate a smoother transition than typical transformational acquisitions.

Gaming & Collectibles Industry Expert

This acquisition positions Alliance Entertainment as a comprehensive force in physical entertainment distribution across both mass and specialty channels. The Diamond assets represent some of the most strategically valuable distribution networks in the collectibles ecosystem.

Alliance Game Distributors holds particular significance as the dominant wholesaler for tabletop games—a sector experiencing remarkable growth driven by titles like Magic: The Gathering, Pokémon TCG, and Dungeons & Dragons. These aren't merely products but community-building platforms with passionate consumer bases that drive consistent purchasing behavior.

Diamond Comic Distributors, despite recent challenges, remains the backbone of comic book distribution to the specialty market. Its PREVIEWS catalog is the industry's primary ordering tool and an influential marketing vehicle reaching 30,000+ dedicated collectors monthly.

The Collectible Grading Authority adds a sophisticated service dimension that addresses the growing demand for authentication in secondary markets. Having graded 500,000+ items across 50+ countries, it establishes AENT in the high-margin authentication services segment that's crucial to collectibles valuation.

The timing is opportune as physical collectibles experience renewed consumer interest. While digital media dominates many entertainment categories, tabletop gaming and physical collectibles have demonstrated remarkable resilience and growth. The acquisition creates a distribution powerhouse that connects passionate fan communities with the products they actively seek, leveraging AENT's fulfillment infrastructure across multiple complementary categories.

Acquisition will add iconic comic and game brands, unlocks cross-selling synergies across mass retail and specialty channels, and strengthens position in fan-driven collectibles market

Acquired assets expected to generate over $200 million in revenue and over $10 million in EBITDA in FY2026

PLANTATION, Fla., March 25, 2025 (GLOBE NEWSWIRE) -- Alliance Entertainment Holding Corporation (Nasdaq: AENT), a global distributor and wholesaler specializing in music, movies, video games, electronics, arcades, and collectibles, today announced that it has been selected as the winning bidder to acquire substantially all of the assets of Diamond Comic Distributors, Inc., currently being sold through a court-supervised bankruptcy process. The proposed acquisition, which is subject to Bankruptcy Court approval, includes Diamond Comic Distributors (U.S.), Alliance Game Distributors, Diamond Select Toys & Collectibles, and Collectible Grading Authority, which collectively represent a 42-year-old enterprise recognized as a category-defining leader in comic books, tabletop games, pop-culture merchandise, and collectible grading.

“This is a transformative opportunity to expand our leadership in the world of gaming and physical collectibles and deepen our reach into thriving fan-driven categories,” said Jeff Walker, CEO of Alliance Entertainment. “With their legacy of exclusive titles, deep retail relationships, and strong presence in comics, tabletop games, and collectible merchandise, these businesses are highly complementary to our existing distribution and fulfillment model. We see powerful cross-selling potential between our product lines and customer bases, expanding the reach of our expanded product portfolio across both mass retail and specialty channels.”

“We’re incredibly honored to welcome the talented teams from Diamond Comic Distributors, Alliance Game Distributors, and Collectible Grading Authority to the Alliance Entertainment family,” said Bruce Ogilvie, Executive Chairman of Alliance Entertainment. “These are passionate professionals who have built deep relationships across the fandom, hobby, and collectibles communities. We look forward to supporting them, learning from them, and investing in their success. To the suppliers, creators, and publishing partners that make this ecosystem so dynamic, we’re excited to collaborate and build lasting value together. And to the customers who rely on these brands every day, we remain committed to delivering the excellent service and reliability you expect, and taking it even further.”

The acquired businesses bring a combination of scale, cultural cachet, and commercial reach. Together, Diamond Comic Distributors (U.S.), Alliance Game Distributors, and Collectible Grading Authority support over 5,000 retail storefronts, ranging from independent comic and game stores to specialty retailers, mass-market chains, and leading e-commerce platforms.

Through these businesses, Alliance Entertainment will gain deeper access to a highly engaged community of retailers and fans who form the backbone of the $50+ billion global market for tabletop games, collectibles, comics, and pop culture merchandise. These businesses have long-standing relationships with many of the most iconic brands and publishers in the fandom ecosystem, including:

• Dungeons & Dragons, Magic: The Gathering (Wizards of the Coast / Hasbro)
• Pokémon Trading Card Game
• Marvel, BOOM! Entertainment, and Dark Horse Comics
• Dragon Ball, One Piece, Digimon (Bandai Namco)

Alliance Game Distributors is a category leader in the fast-growing tabletop games sector, offering over 15,000 unique SKUs to 3,000+ independent hobby retailers across North America. It partners with over 150 game publishers, delivering industry staples and breakout hits in card games, board games, role-playing games (RPGs), and miniatures.

Diamond Comic Distributors (U.S.) is the industry’s long-standing distribution backbone for comic books, graphic novels, action figures, and licensed collectibles. With over 40 years of history, it remains the go-to fulfillment engine for 2,500+ comic shops and thousands of additional retailers through its flagship PREVIEWS^® catalog, which reaches 30,000+ readers each month.

Collectible Grading Authority brings a high-value service layer to Alliance’s offering, having authenticated and graded over 500,000 collectibles for dealers, collectors, and auction firms in more than 50 countries.

These businesses will not only expand Alliance Entertainment’s product portfolio, they extend its market coverage. With substantial account overlaps already identified, the acquisition will enable immediate cross-selling potential: introducing Diamond’s fan-favorite intellectual property into Alliance’s mass retail and e-commerce channels, while bringing Alliance’s extensive catalog of physical media and licensed merchandise into thousands of specialty accounts.

“This transaction will position Alliance to deliver long-term value by bringing together some of the most iconic fan-driven brands in the world with the industry’s most efficient and scalable distribution platform,” added Walker. “It aligns directly with our strategy to grow through high-impact, capital-light opportunities that strengthen our market share and expand our margin potential. By integrating these assets, we’re increasing our product exclusivity, expanding retail and e-commerce reach, and unlocking new cross-channel synergies, all while staying disciplined in our operational execution. This is exactly the type of opportunity that supports our long-term goals for sustainable growth, profitability, and shareholder value.”

Alliance Entertainment intends to finance the acquisition through an amendment to its existing $120 million Revolving Credit Facility, which it expects to increase to $160 million. The amended facility will be secured by a pledge of the acquired assets, alongside the Company's existing collateral. The transaction and credit facility amendment are expected to close in April 2025, subject to final bankruptcy court approval and customary closing conditions.

About Alliance Entertainment
Alliance Entertainment (NASDAQ: AENT) is a premier distributor of music, movies, toys, collectibles, and consumer electronics. We offer over 325,000 unique in-stock SKU’s, including over 57,300 exclusive compact discs, vinyl LP records, DVDs, Blu-rays, and video games. Complementing our vast media catalog, we also stock a full array of related accessories, toys, and collectibles. With more than thirty-five years of distribution experience, Alliance Entertainment serves customers of every size, providing a robust suite of services to resellers and retailers worldwide. Our efficient processing and essential seller tools noticeably reduce the costs associated with administrating multiple vendor relationships, while helping omni-channel retailers expand their product selection and fulfillment goals. For more information, visit www.aent.com.

Forward Looking Statements
Certain statements included in this Press Release that are not historical facts are forward-looking statements for purposes of the safe harbor provisions under the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements generally are accompanied by words such as “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “should,” “would,” “plan,” “predict,” “potential,” “seem,” “seek,” “future,” “outlook,” and similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements include, but are not limited to, statements regarding estimates and forecasts of other financial and performance metrics and projections of market opportunity. These statements are based on various assumptions, whether identified in this Press Release, and on the current expectations of Alliance’s management and are not predictions of actual performance. These forward-looking statements are provided for illustrative purposes only and are not intended to serve as and must not be relied on by an investor as, a guarantee, an assurance, a prediction, or a definitive statement of fact or probability. Actual events and circumstances are difficult or impossible to predict and will differ from assumptions. Many actual events and circumstances are beyond the control of Alliance. These forward-looking statements are subject to a number of risks and uncertainties, including risks relating to the anticipated growth rates and market opportunities; changes in applicable laws or regulations; the ability of Alliance to execute its business model, including market acceptance of its systems and related services; Alliance’s reliance on a concentration of suppliers for its products and services; increases in Alliance’s costs, disruption of supply, or shortage of products and materials; Alliance’s dependence on a concentration of customers, and failure to add new customers or expand sales to Alliance’s existing customers; increased Alliance inventory and risk of obsolescence; Alliance’s significant amount of indebtedness; our ability to refinance our existing indebtedness; our ability to continue as a going concern absent access to sources of liquidity; risks and failure by Alliance to meet the covenant requirements of its revolving credit facility, including a fixed charge coverage ratio; risks that a breach of the revolving credit facility, including Alliance’s recent breach of the covenant requirements, could result in the lender declaring a default and that the full outstanding amount under the revolving credit facility could be immediately due in full, which would have severe adverse consequences for the Company; known or future litigation and regulatory enforcement risks, including the diversion of time and attention and the additional costs and demands on Alliance’s resources; Alliance’s business being adversely affected by increased inflation, higher interest rates and other adverse economic, business, and/or competitive factors; geopolitical risk and changes in applicable laws or regulations; risk that the COVID-19 pandemic, and local, state, and federal responses to addressing the pandemic may have an adverse effect on our business operations, as well as our financial condition and results of operations; substantial regulations, which are evolving, and unfavorable changes or failure by Alliance to comply with these regulations; product liability claims, which could harm Alliance’s financial condition and liquidity if Alliance is not able to successfully defend or insure against such claims; availability of additional capital to support business growth; and the inability of Alliance to develop and maintain effective internal controls.

For investor inquiries, please contact:
Dave Gentry, CEO
RedChip Companies, Inc.
1-407-644-4256
AENT@redchip.com

FAQ

What is the expected revenue from AENT's Diamond Comic Distributors acquisition?

The acquired assets are expected to generate over $200 million in revenue and over $10 million in EBITDA in FY2026.

How many retail locations will AENT serve after the Diamond Comic acquisition?

The acquisition will allow AENT to support over 5,000 retail storefronts, including independent comic and game stores, specialty retailers, and mass-market chains.

How is AENT financing the Diamond Comic Distributors acquisition?

AENT will finance the acquisition through an amended Revolving Credit Facility, increasing from $120 million to $160 million.

When will AENT complete the Diamond Comic Distributors acquisition?

The transaction is expected to close in April 2025, subject to final bankruptcy court approval and customary closing conditions.

What major brands will AENT gain access to through the Diamond Comic acquisition?

AENT will gain access to iconic brands including Dungeons & Dragons, Magic: The Gathering, Pokémon Trading Card Game, Marvel, BOOM! Entertainment, Dark Horse Comics, and more.