Corus snaps up Nelvana
Corus Entertainment, the media spinoff from Shaw Communications has bought animation firm Nelvana for $540 million.
Corus is shelling out $48 a share for Nelvana, 60 per cent in cash and 40 per cent in non-voting shares of Corus.
Corus already has a stake in Nelvana valued at $14 million.
Michael Hirsh and Patrick Loubert will stay on as co-chief executives of Nelvana.
John Cassaday, president and CEO of Corus said, "The opportunity to acquire an outstanding Canadian content company with exceptional international credentials presents itself very rarely.
"Nelvana's focus -- children's entertainment -- is completely in line with Corus' strategy, and the quality and consumer recognition of Nelvana's characters and brands is unparalleled."
Nelvana, a 29-year old company, is the world's largest independent supplier of children's TV programming, with 80 per cent of its revenues coming from international markets.
Some of Nelvana's popular characters include Franklin the Turtle, Little Bear and Pippi Longstocking.
Cassaday told reporters at a news conference that Nelvana was expected to boost earnings by $40 million before interest, tax, depreciation and amorization once earnings are combined in November.
Michael Hirsh, co-chief executive Nelvana said, "In response to the global trend towards the convergence of content and distribution, we are confident this significant potential will be realized within Corus.
"We believe this deal is terrific for all Nelvana shareholders and employees."
The deal is slated to close in November, and includes a break-up fee payable to Corus if it falls through.
Analysts expect the newly merged company to try to buy the Cinar assets, in which Nelvana has publicly expressed an interest. Cinar has a 25 per cent stake in the Teletoon channel, while Nelvana has 20 per cent.
Shares of Nelvana have climbed 60 per cent since early August, and the rally continued on Monday with Nelvana stock ending up $4.85 or 12 per cent to $45.30.