DHX Media is to acquire Family, the most-viewed children’s channel in Canada, as well as Disney XD, Disney Junior (English-language channel) and Disney Junior (French-language channel) (together the “Family Channel Business”) from Bell Media for approximately $170 million in cash.
The purchase price is expected to be financed with an expanded underwritten credit facility and with cash on hand. The transaction is expected to close in 2014 pending approval by the Competition Bureau and the Canadian Radio-television and Telecommunications Commission (“CRTC”) and satisfaction of other customary closing conditions.
“The acquisition of these high-quality Canadian channels represents an exciting new addition to DHX, one that complements and enhances all areas of our business and positions us for our next stage of growth” said Michael Donovan, CEO of DHX Media.
“Broadcasting is a natural extension for the company,” added Steven DeNure, President and COO of DHX Media. “The acquisition of Family Channel further enhances our ability to operate as a vertically integrated player in the global children’s content business.”
Family, the number one channel across all kids audiences was launched in 1988 and has approximately 5.7 million subscribers and an English market share of 29.6 per cent for viewers 2 to 17 (based on Broadcast Bureau of Measurement data for broadcast year 2011/2012). Over the trailing 12 months ended August 2013, these channels generated revenue of approximately $81 million and Direct EBITDA (before corporate allocations) of approximately $27 million (unaudited). Over the past three years, revenue has increased at a compounded rate of approximately 7 per cent.