The purchase of eOne by Hasbro, the third largest toy maker in the world adds beloved, global preschool brands to its portfolio and brings in eOne’s ability to create high-quality content across multiple platforms.

By Ian Horswill

Posted on August 23, 2019

Hasbro, the toy and board game business, has shown its future intentions with the purchase of Canadian business Entertainment One, which makes Peppa Pig, PJ Masks, Ben & Holly’s and Ricky Zoom.

The US$4 billion all-in-cash transaction for Entertainment One (eOne) furthers the US toy and board maker’s push into infant and preschool TV and film entertainment. Entertainment One also has a substantial TV library along with theatrical distribution in Canada, the UK, Benelux and Australia, wrote The Hollywood Reporter.

The companies have identified about US$130 million in cost savings by 2022.

“The acquisition of eOne adds beloved story-led global family brands that deliver strong operating returns to Hasbro’s portfolio and provides a pipeline of new brand creation driven by family-oriented storytelling, which will now include Hasbro’s IP,” CEO Brian Goldner said in a statement. “In addition, Hasbro will leverage eOne’s immersive entertainment capabilities to bring our portfolio of brands that have appeal to gamers, fans and families to all screens globally and realise full franchise economics across our blueprint strategy for shareholders. We are excited to welcome eOne’s talented employees from around the world into the Hasbro family.”

Darren Throop, CEO of eOne, said there’s a cultural fit between the two companies.

“Entertainment One’s stated mission is to unlock the power and value of creativity which aligns with Hasbro’s corporate objectives. eOne teams will continue to do what they do best, bolstered by the access to Hasbro’s extensive portfolio of richly creative IP and merchandising strength. In addition, the resulting expanded Hasbro presence in Canada through eOne’s deep roots will bring world class talent and production capabilities to Hasbro. Along with our leadership team, I look forward to working with Hasbro on our joint growth and success for many years to come,” he said.

Entertainment One board chairman Allan Leighton said that he is “very pleased by this exciting development,” calling it a testament to eOne’s management vision, leadership and execution.

The purchase of eOne by the third largest toy maker in the world adds beloved, global preschool brands to its portfolio and brings in eOne’s ability to create high-quality content across multiple platforms.

Entertainment One's infant TV show PJ Masks.

The sale to the company behind Monopoly, Nerf, Furby, Tonka, My Little Pony, Transformers and Twister, raises questions about whether eOne will remain in the business of producing adult-focused movies and TV series. Entertainment One’s active slate includes Netflix’s Trailer Park Boys and We TV’s Growing Up Hip Hop: New York, Variety reported.

Goldner has orchestrated a strategic shift toward Hollywood that has yielded major film and streaming deals as the entertainment business craves pre-sold brands. Hasbro Studios has made movies for Universal (Ouija) and delivered multiple instalments of Transformers and G.I. Joe at Paramount. In 2017, the companies agreed to continue their production and distribution deal through 2022, Deadline reported. The toy and board game maker also has an exclusive streaming deal with Netflix.

Under the terms of the deal, eOne shareholders will receive US$6.80 in cash for each common share, which Hasbro said represents a 31% premium to its 30-day average price.

The toy maker will use debt financing and a US$1 billion to US$1.25 billion equity offering to fund the takeover of eOne, which trades on the London Stock Exchange.

Shares in eOne have gained 23% in 2019 to date on the London Stock Exchange whereas its new owner’s shares have declined 4% in after-hours trading.