Hasbro Completes Sale of Entertainment One Film and Television Business to Lionsgate
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Insights
The divestiture of Entertainment One's film and TV business by Hasbro to Lionsgate represents a strategic refocusing for Hasbro, which aligns with its Blueprint 2.0 strategy. This transaction, amounting to $375 million in cash plus the assumption of production financing loans, allows Hasbro to streamline its operations and concentrate on leveraging its proprietary brands for entertainment purposes.
The retirement of approximately $400 million of floating rate debt as a consequence of this sale is a significant move towards improving Hasbro's balance sheet. This reduction in leverage could enhance the company's financial flexibility and potentially result in a lower cost of capital, which is an important factor for investors to consider when evaluating the company's future growth prospects and risk profile.
From a financial perspective, the deal's impact on Hasbro's revenue streams and profit margins warrants attention, as the divestment of a business segment could lead to a short-term decrease in revenues. However, the focus on core competencies and brand monetization could yield long-term benefits, including stronger brand alignment and potentially higher-margin revenue sources.
The sale of Entertainment One's assets to Lionsgate may signal a shift in the competitive landscape of the entertainment industry. Hasbro's decision to retain the development and production of entertainment based on its own brands suggests a vertical integration strategy, focusing on in-house creation and distribution of content.
Understanding the market dynamics, it is important to note that content creation and ownership are becoming increasingly valuable in the entertainment sector, with direct-to-consumer models gaining traction. Hasbro's move to concentrate on its established brands could position it favorably to capitalize on this trend, potentially creating new revenue streams through partnerships, licensing deals and digital platforms.
Analyzing consumer trends, the demand for content based on popular brands is high and Hasbro's portfolio, which includes iconic toys and games, could resonate well with both existing fans and new audiences. This strategic focus might also open avenues for cross-promotional activities, enhancing brand visibility and engagement.
The involvement of multiple legal firms in the transaction between Hasbro and Lionsgate indicates the complexity of such a deal, especially considering it encompasses international operations, as evidenced by the inclusion of Entertainment One Canada Limited. The legal intricacies of this sale, including the transfer of intellectual property rights and the assumption of production financing loans, are critical elements that can significantly influence the success of the transaction.
For stakeholders, the legal stability and clarity post-transaction are essential, as they can directly affect the continuity of operations and the exploitation of the sold assets. The role of legal counsel is to ensure that the transaction adheres to regulatory requirements, mitigates risks and secures the interests of the involved parties, which in turn can influence investor confidence.
Moreover, the retirement of debt as part of the deal has legal implications, such as the release of any associated security interests or covenants, which can further streamline Hasbro's corporate structure and operational freedom.
Hasbro to Retain Entertainment for Hasbro Brands
The sale includes unscripted television production companies Renegade and Daisybeck, as well as Hasbro’s interest in the Canadian film & TV operations of Entertainment One Canada Limited.
In connection with the closing, Hasbro expects to retire approximately
J.P. Morgan and Centerview Partners served as lead financial advisors to Hasbro in the transaction. Cravath, Swaine & Moore LLP, Mayer Brown International LLP and Stikeman Elliott LLP acted as legal counsel to Hasbro and Osler, Hoskin & Harcourt LLP acted as legal counsel to Entertainment One Canada Limited.
About Hasbro
Hasbro is a leading toy and game company whose mission is to entertain and connect generations of fans through the wonder of storytelling and exhilaration of play. Hasbro delivers engaging brand experiences for global audiences through toys, consumer products, gaming and entertainment, with a portfolio of iconic brands including MAGIC: THE GATHERING, DUNGEONS & DRAGONS, Hasbro Gaming, NERF, TRANSFORMERS, PLAY-DOH and PEPPA PIG, as well as premier partner brands.
Hasbro is guided by our Purpose to create joy and community for all people around the world, one game, one toy, one story at a time. For more than a decade, Hasbro has been consistently recognized for its corporate citizenship, including being named one of the 100 Best Corporate Citizens by 3BL Media, one of the World’s Most Ethical Companies by Ethisphere Institute and one of the 50 Most Community-Minded Companies in the
Hasbro Forward-Looking Statements
Certain statements in this press release contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be accompanied by such words as “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,” “intend,” “may,” “plan,” “potential,” “project,” “target,” “will” and other words and terms of similar meaning. Among other things, these forward-looking statements include statements regarding the intended uses of the proceeds from the sale of the eOne film and television business and expected benefits of the transaction. Hasbro’s actual actions or results may differ materially from those expected or anticipated in the forward-looking statements due to both known and unknown risks and uncertainties. Specific factors that might cause such a difference include those risks detailed from time to time in Hasbro’s filings with the
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View source version on businesswire.com: https://www.businesswire.com/news/home/20231227552233/en/
Investors:
Kristen Levy
kristen.levy@hasbro.com
401-727-5440
Media:
Roberta Thomson
bertie.thomson@hasbro.com
650-285-9721
Source: Hasbro, Inc.
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