DHX buys Degrassi producer in $30m deal

DHX Media is buying Epitome, the producer behind Canadian teen drama franchise Degrassi, for C$33 million (US$29.9 million).

DHX will pay around C$19.5 million in cash and rest through an issue of nearly three million DHX shares, though these are subject to a six-month lock–up agreement.

In turn, DHX will get 469 half-hours of programmes from the Degrassi franchise, which has been production since 1980; 216 half hours of other Epitome series; and Epitome Studios, which owns a 98,400 square foot studio in Toronto.

It also gets 19x60mins episodes of drama The L.A. Complex, 52x30mins episodes of drama series Instant Star, 47x60mins of Riverdale, and 28x30mins episodes of Liberty Street.

Epitome co-founders Linda Schuyler and Stephen Stohn will remain with the company after the deal closes.

“Over the past thirty-four years, we have had the great pleasure of seeing Degrassi become not only part of the fabric of Canadian television, but also of teen culture worldwide,” they said in a joint statement.

“DHX Media’s commitment to strong youth programming, combined with their expertise across all facets of traditional and digital TV, makes them ideally suited to shepherd Degrassi into the future.”

“With Degrassi’s enduring international appeal and suitability for digital broadcast, this iconic Canadian show represents a highly complementary addition to our library and is a compelling and logical expansion for DHX Media from kids into the global teen market,” said DHX CEO Michael Donovan.

DHX has rapidly expanding through acquisitions in recent years. Having acquired Canadian kids TV rival Cookie Jar Entertainment for C$111 million in 2012, it then bought the commercial arm of Teletubbies producer Ragdoll for £17.4 million (US$28.8 million), and then acquired Family Channel and three Disney-branded Canadian kids channels for C$170 million.

In May 2013, Epitome reported revenue of C$24.4 million on earnings of about C$6.6 million.