DHX Media to acquire Family Channel and three other childrenâ€™s channels from Bell Media
Transaction expected to be materially accretive, provide strong and stable cash flow, revenue diversification
Halifax, Canada - (November 28, 2013) - DHX Media Ltd. (â€œDHXâ€ or the â€œCompanyâ€) (TSX: DHX) has entered into a definitive agreement to acquire Family, the most-viewed childrenâ€™s channel in Canada, as well as Disney XD, Disney Junior (English-language channel) and Disney Junior (French-language channel) (together the â€œFamily Channel Businessâ€) from Bell Media for approximately $170 million in cash, subject to certain customary post-closing adjustments. 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 (â€œCRTCâ€) and satisfaction of other customary closing conditions.
â€œThe 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 growthâ€ said Michael Donovan, CEO of DHX Media.
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% 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%.
â€œThe acquisition of these well positioned properties is expected to be materially accretive.â€ added Dana Landry, CFO of DHX Media. â€œIt will greatly expand the scale of our business, with revenue increasing by more than 70% and EBITDA by more than 90% for the last 12 months on a pro-forma basis.â€
Concurrent with the execution of the definitive agreement, DHX has entered into a commitment agreement with RBC Capital Markets to provide a fully underwritten senior debt financing. The enlarged financing package will consist of a $210 million five-year term loan facility to refinance existing debt and pay a portion of the cash consideration of the Transaction and a $30 million revolving credit facility for working capital and general corporate purposes.
Additional Information on Acquired Channels
Additional information can be found in the investor presentation posted on the investor relations portion of our website located at Investor Relations.
Family Channel is the most-viewed childrenâ€™s channel in Canada offering a dynamic blend of shows celebrating family life, comprised of Canadian productions alongside acquired series, 60% of which come from Disney. It is a premium, commercial-free asset, holding a Category â€œAâ€ Pay-TV license, giving it â€œmust-carryâ€ designation from the CRTC, which requires cable and satellite companies to include the channel in all services.
Disney Junior (English) delivers a range of engaging and developmental-based programming for kids 2-7, with a compelling mix of series and specials that combine storytelling and entertainment in a commercial-free environment. The channel holds a multiplex license from the CRTC with Family Channel. Launched in 2007, Disney Junior (English) has approximately 4.9 million subscribers, representing a market share of 13.4% among its primary target audience of kids 2-7.
Disney Junior (French) offers commercial-free entertainment that focuses on magical, musical and developmental-based programming for kids 2-6. Disney Junior (French) was launched in 2010 and has approximately half a million subscribers.
Disney XD is a high energy, advertising-supported network that features live-action and animated series and movies of a comedic and adventurous nature. Launched in 2011, it has approximately 4.5 million subscribers, representing a market share of 3.5% among its primary target audience of boys 6-12