DHX Media to add Peanuts Gang to its holdings through US$345M deal

Canadian media company makes major buy Halifax-based DHX Media Inc. spends US$345 million to acquire rights to Peanuts and Strawberry Shortcake cartoons.

HALIFAX -- Charlie Brown and Strawberry Shortcake are set to join the Teletubbies, Inspector Gadget and Caillou at DHX Media under a US$345-million agreement announced Wednesday.

The Halifax-based children's entertainment company said it plans to bring the brands into the digital streaming age as the deal adds hundreds of episodes of new content for its library and creates opportunities to expand them into new areas such as its WildBrain network on YouTube.

In a world where parents have near unlimited in choices in what their children can watch, brands like Peanuts and Strawberry Shortcake stand out, DHX chief executive Dana Landry said.

"Even people who have never seen a Peanuts show know who Charlie Brown and Snoopy are," he said in an interview.

"Both Peanuts and Strawberry Shortcake are exactly the kind of powerhouse children's and family properties we have been built to receive."

Under the agreement, DHX would acquire an 80 per cent controlling interest in Peanuts and 100 per cent of Strawberry Shortcake from Iconix Brand Group Inc.

The plan has the blessing of Charles M. Schulz's widow, whose family would continue to have a 20 per cent share of the rights to the Peanuts cartoon and animation franchise.

"DHX Media feels like a perfect fit for Peanuts," Jean Schulz said in a joint statement issued by the company.

Before the deal was announced, DHX Media was already producing, in conjunction with Iconix, a new animated series based on Strawberry Shortcake in a bid to inject new life to the brand.

"You do have to refresh content from time to time," Landry said.

The proposed deal has been approved by the boards of DHX Media and Iconix Brand Group. It also requires various regulatory approvals and completion of a financing package.

DHX has hired RBC Capital Markets and Jefferies Finance to provide a fully underwritten debt financing covering the purchase price and refinance substantially all of the company's debt.

The company -- which operates specialty television channels in Canada in addition to managing global sales of its programming library -- also announced Wednesday that its third-quarter revenue and profit were lower than last year.

The company earned $7.6 million or six cents per share for the quarter ended March 31, down from $10.2 million or eight cents per share a year ago.

Revenue fell seven per cent to $78 million for the quarter compared with $84.1 million a year ago.