Hasbro, the multinational toy and board game company, has officially announced the sale of Entertainment One (eOne) to Lionsgate for $500 million. This confirmation comes after weeks of speculation, with Deadline previously reporting that Lionsgate was in the lead to acquire eOne, which includes popular studios such as Woman King and Yellowjackets. The news broke just before Hasbro’s Q2 earnings call, creating a buzz in the entertainment industry.
An Unexpectedly Low Valuation
Interestingly, Hasbro purchased eOne for a staggering $4 billion in 2019, making this $500 million sale quite surprising. The deal comprises $375 million in cash, along with the assumption by Lionsgate of production financing loans, subject to certain purchase price adjustments. The Boards of Directors of both companies have approved the transaction, but it still needs to satisfy closing conditions and obtain regulatory approvals.
To retire a significant amount of floating rate debt by the end of the year, Hasbro plans to utilize the proceeds from the sale. CEO Chris Cocks expressed his satisfaction with the deal, stating, “This sale fully aligns with our strategy, and we are pleased to bring the process to a successful close. Lionsgate’s management team is experienced in entertainment and adept at driving value, and we’re glad to have found such a good home for our eOne film & TV business.” Cocks also mentioned the anticipation of future collaborations with Lionsgate, particularly regarding the highly-anticipated movie adaptation of Monopoly.
Lionsgate’s Acquisition and eOne’s Restructuring
As part of this deal, Lionsgate has acquired eOne’s scripted and unscripted TV production, all film production, related global distribution, a vast content library consisting of over 6,500 titles, and Hasbro’s stake in eOne’s Canadian film and TV business. However, Hasbro will retain its Family Brands division, which includes iconic properties like Peppa Pig and PJ Masks.
In preparation for the potential sale, eOne has recently undergone several rounds of layoffs, resulting in a significant reduction of its film and television staff. Approximately 20% of the independent studio’s workforce has been affected by these layoffs. Furthermore, as part of its broader restructuring plan announced earlier this year, which involves cutting 15% of its global workforce, Hasbro decided to close eOne’s theatrical operations in the UK.
Lionsgate’s Restructuring and Future Prospects
Meanwhile, Lionsgate, whose vice chair Michael Burns sits on the Hasbro board, is in the process of separating its film and TV studio from Starz, further streamlining its operations. This move highlights Lionsgate’s commitment to enhancing its capabilities and positioning itself as a leading player in the entertainment industry.
With this significant acquisition, Lionsgate aims to expand its foothold in the entertainment market and leverage eOne’s extensive content library to drive growth. The addition of eOne’s assets will provide Lionsgate with a diverse range of content for distribution and production, reinforcing its position as a major player in the industry.
The much-anticipated sale of Entertainment One to Lionsgate for $500 million is poised to transform both companies’ landscapes. Hasbro’s strategic decision to divest eOne and Lionsgate’s bold move to acquire it signals a new chapter in their respective growth stories. As the entertainment industry continues to evolve, these industry giants are positioning themselves to thrive in an ever-changing market.