Hasbro is selling its eOne television and movie business to Lionsgate in a deal worth around $500 million, after having paid $4 billion for the company four years ago.
Hasbro said the agreement with Lionsgate includes $375 million in cash and the assumption of production financing loans.
The acquisition will give Lionsgate access to eOne’s library of almost 6,500 titles, including Grey’s Anatomy, Yellowjackets and The Woman King. Lionsgate will also receive film development rights to Hasbro’s Monopoly, based on the popular board game.
The deal allows the company to continue to scale its operations in the UK and Canada, where it has recently launched production partnerships with BBC Studios, Channel Four, the CBC, Rogers’ CityTV and Bell Media.
Hasbro purchased Entertainment One in 2019 in an all-cash deal valued at about $4 billion. At the time, Hasbro was interested in eOne’s pre-school brands, which included Peppa Pig and PJ Masks. Hasbro will still have access to Peppa Pig and PJ Masks, as it will keep ownership of the family brands division.
While Hasbro had high hopes for the deal, in November it announced that it was looking to sell the part of eOne’s television and film business not directly supporting its branded entertainment strategy.
The boards of Hasbro and Lionsgate have approved the transaction, which is targeted to close by the end of the year.
Hasbro said it will use proceeds from the deal to retire a minimum of $400 million of floating rate debt by year’s end.
The toy company also reported its financial results for the second quarter on Thursday. Hasbro lost $235 million, or $1.69 per share, in the period, reversing a profit a year earlier.
Earnings, adjusted for asset impairment costs and amortisation costs, came to 49 cents per share. That was below the 58 cents per share analysts surveyed by Zacks Investment Research expected.
Revenue for the company fell 10 per cent to $1.21 billion, beating Wall Street’s estimate of $1.11 billion.
A year ago, Hasbro reported an adjusted profit of $1.15 dollars per share on revenue of $1.34 billion.
Shares of Hasbro rose more than 2 per cent in morning trading.
