US-based kids content company Genius Brands International has acquired Canadian prodco Wow! Unlimited Media for $53m.
The deal will allow Genius Brands to use WOW!’s production facilities to access Canadian tax credits and move animation production currently being undertaken by service companies in China in-house. Financial details have not been revealed, but the acquisition is being funded by cash and stocks.
Genius brands chairman and CEO Andy Heyward also revealed that upcoming WOW!-owned content will be added to its OTT service Kartoon Channel! and the company would seek to leverage the IP through new consumer products and global distribution deals.
WOW!’s Canadian operations are to continue as a Canadian-controlled business, though no details have yet been provided about the impact on US operations.
The deal will also allow Genius Brands to expand its audience demographics beyond kids into teens and young adult audiences and tap into WOW!’s AVOD presence on platforms such as YouTube and TikTok, where the group has placed shows such as Bee And Puppycat and Catbug.
Investors, however, seemed less convinced by the acquisition, with Genius Brands stock dropping by 19% yesterday, following the announcement of the acquisition. This, however, came following a rise on Tuesday ahead of the reveal no doubt buoyed by the imminent, but then unannounced “positive business development.”
WOW! to ‘substantially accelerate’ Genius growth
Founded in 2016 following the merger of Rainmaker, Frederator and Ezrin Hirsh Entertainment, WOW! is the owner of studios including Adventure Time and Castlevania producer Frederator Studios and Mainframe Studios, which is behind Madagascar – A Little Wild and Barbie Dreamhouse.
It also runs the Frederator Network on YouTube, an animation and pop culture-driven digital network that claims more than one billion average monthly views and 2,500+ creator driven channels.
WOW! said that it generated more than $56.4m in revenue from July 2020-June 2021, with over $62m of contracted production in the next year.
Following the sale, Michael Hirsh, CEO of WOW!, will join the Genius Brands board of directors and continue his responsibilities for Mainframe, Frederator Studios, networks and platforms.
“The acquisition of WOW! substantially accelerates the financial growth of Genius Brands, delivering on our promise to shareholders to execute meaningful and accretive acquisitions, as we seek to rapidly consolidate the marketplace and become the foremost producer, broadcaster, and consumer product licensor of high-quality children’s entertainment in the world,” said Heyward.
Hirsh, meanwhile, described the acquisition as a “powerful partnership that brings immediate and significant value for shareholders.”