Under the terms of the agreement, Cookie Jar will pay approximately $31.5 million for all of the issued and outstanding equity in DIC in a transaction valued at approximately $87.6 million. Upon closing, DIC will continue as a subsidiary of Cookie Jar, which will remain a private company.
The transaction will create one of the world's largest independent children's entertainment and education companies with an impressive stable of proprietary and licensed brands, combined with an exceptional animation library with nearly 6,000 half-hours of programming featuring some of the world's most recognizable characters.
With this transaction, Cookie Jar will have access to the merchandising and licensing rights to such successful brands as American Greetings' STRAWBERRY SHORTCAKE, which has earned $3 billion at retail since DIC re-launched the brand in 2004; Mommy & Me, a parent-oriented, direct-to-retail product line featured at Wal-Mart; as well as INSPECTOR GADGET, HORSELAND and CAKE.
Cookie Jar's proven track record in production and distribution of television programs worldwide is complemented by DIC's strength in merchandising and licensing of consumer products. DIC's subsidiary, Copyright Promotions, the leading independent licensing agency in Europe, represents many of the world's most popular entertainment brands and most of the Hollywood studios. In addition, DIC has established relationships with global brands such as McDonald's, General Mills and Wal-Mart. The merger will also include DIC's one-third interest in KidsCo, an international children's television channel that currently has five million subscribers. NBC-Universal and Corus Entertainment are also partners in KidsCo.
From a financial perspective, the combination of the two companies balances and diversifies the combined company's revenue streams by geography and activity.
"This transaction will bring together two dynamic and successful organizations with a shared passion for excellence in children's entertainment," said Cookie Jar's CEO Michael Hirsh. "With the greater scale and resources of the combined company, we will be in a much stronger position to deliver on our promise of bringing the best entertainment and educational content to children and families around the world through the medium of their choice. I first had the pleasure of working with Andy Heyward on the original INSPECTOR GADGET series and look forward to welcoming him into our team."
''We are thrilled to be joining forces with Cookie Jar's highly respected team,'' said DIC's Chairman and CEO Andy Heyward. ''Our two organizations are a perfect fit, with compelling brands, strong licensing and merchandising capabilities and a commitment to quality programming that reflects the needs and aspirations of children and families around the world. I look forward to working closely with Michael and Toper in bringing our two organizations together and charting our future growth.''
''The combination of Cookie Jar and DIC is exciting for kids and families, broadcasters and retailers around the world,'' added Cookie Jar's President and COO Toper Taylor. ''Our combined company will be a powerhouse in children's brands, with global reach through television, DVD, online, books, music and consumer products. We will be a more valuable partner for broadcasters, licensors and retailers with our expanded library, broad market reach, and unmatched capabilities in taking a property from creation to global broadcast, licensing, retail and promotions. In particular, we are very pleased to be reunited with American Greetings -- we have an enormous amount of respect for their senior management and talent-rich organization."
DIC President Jeffrey Edell stated, "By merging the assets of two global media companies, we are creating the opportunity to build an industry powerhouse that provides a viable platform for future integration of children's businesses worldwide. In addition to an extensive brand portfolio and broadcast real estate, DIC brings an extensive new media business strategy that will further strengthen and enhance the Cookie Jar brand."
Subject to approval by DIC's shareholders and other customary approvals, the transaction is expected to close by fall 2008.