Much-anticipated deal is a good fit for both companies and offers strong growth opportunities worldwide.
DreamWorks Animation, home to penguins, pandas and felines, has added an iconic dog, a friendly ghost and many other venerable properties to its portfolio with the acquisition of Classic Media from Boomerang Media Holdings I LLC, a portfolio company of Chicago-based private equity firm GTCR.
DreamWorks, which paid $155 million in cash for Classic Media and its IP library, makes sense for both parties as it gives DWA the opportunity to expand and maximize new content across multiple entertainment platforms, as well as to grow the potentially lucrative consumer products business at retailers worldwide.
Classic Media's library features more than 450 titles and 6,100 episodes of animated and live-action programming. Its well-established properties include Casper the Friendly Ghost, Where's Waldo?, Lassie, The Lone Ranger, George of the Jungle and Rocky & Bullwinkle, as well as VeggieTales, Postman Pat and Noddy in international markets. It also includes The Christmas Classics including Frosty the Snowman, Rudolph the Red-Nosed Reindeer and Santa Claus is Comin' to Town. Additionally, Classic Media owns one of the world's largest comic book archives and media rights to the titles in the Golden Books library.
"Classic Media brings a large and diverse collection of characters and branded assets that are extremely complementary to DreamWorks Animation's franchise business, and we plan to leverage it across our motion picture, television, home entertainment, consumer products, digital, theme park and live entertainment channels," says Jeffrey Katzenberg, chief executive officer of DreamWorks Animation. "Founders and co-CEOs Eric Ellenbogen and John Engelman–seasoned executives with over 20 years of industry experience and a proven track record of success in managing high-quality content–have built an amazing team at Classic Media and are a welcome addition to the DreamWorks Animation family."
According to the exclusive Top 125 Global Licensors report, published annually by License! Global, Classic Media reported $376 million in retail sales of licensed merchandise worldwide and ranked No. 69, while DreamWorks ranked No. 14 with $3 billion in retail sales of licensed merchandise worldwide.
The acquisition makes sense in several ways that neither company could have accomplished on their own. Consider the following:
- DreamWorks now has access to extensive, well-known, kids-driven content that it can easily take to the big screen in its impressive 3D style.
- DreamWorks can expand its pipeline without heavy duty creative and
- development expenses.
- It provides DreamWorks with a stronger theatrical position, as well as expanded potential to develop content for television, gaming and apps.
- DreamWorks has the potential to leverage its strong global network of retailers, licensees and agents.
- It provides DreamWorks with a multitude of opportunities to expand consumer products and brand extensions in various categories and countries beyond the scope of what Classic Media was able to accomplish.
- As DreamWorks continues to develop theme parks and live events, the Classic Media library offers additional brands/properties that can be developed. DreamWorks has already announced plans for U.S. indoor theme park at the Meadowlands Development in New Jersey. The company is also looking to expand in China.
- DreamWorks will be able to manage, finance and execute the additional growth and opportunities that Classic Media could not initiate on its own.
- The acquisition puts DreamWorks in a far more competitive position with rival studios and entertainment companies worldwide.
"No company knows the family entertainment business better than DreamWorks Animation and we are excited to join their family in a natural extension of our long-standing relationship that began years ago on Mr. Peabody & Sherman," says Eric Ellenbogen, co-chief executive officer, Classic Media. "Classic Media brings to the table extensive rights to some of the most beloved family entertainment brands in the world. Our combination with DreamWorks Animation will expand the opportunities for us and for our content and distribution partners around the globe."
One example of the synergy between the two companies had already been established as DreamWorks Animation's 3D feature film Mr. Peabody & Sherman is scheduled for release Dec. 25, 2013. Classic Media has a joint venture with Jay Ward Productions, which includes Rocky & Bullwinkle and Mr. Peabody & Sherman.
With approximately 80 employees headquartered in New York, offices in the U.K. and a division, Big Idea Entertainment, in Nashville, Tenn., Classic Media will continue to operate as a part of DreamWorks.