Toon Boom Animation Sold to Private Equity Firm for $111M

New York-based private equity firm Integrated Media Company has unveiled a deal to buy Toon Boom Animation from Canadian cartoon company Nelvana for CAN$147.5 million (US$111 million), to allow parent Corus Entertainment to pay down debt.

Terms of the deal were not disclosed, but IMC, a division of TPG that invests in media companies, will acquire the Montreal-based 2-D animation software company whose products are used by Disney Television Animation, Amazon, Fox Television Animation, Nelvana and Toei Animation.

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“This move will free up capital, increase Corus’ financial flexibility, and sharpen our focus as we advance our strategic plan and priorities,” Colin Bohm, executive vp of content and corporate strategy at Corus Entertainment, said in a statement.

Corus, a major buyer of American series from Hollywood studio suppliers, in June restructured its original scripted and unscripted content teams to create one team of programming execs working together across TV genres.

Toronto-based Corus is also diversifying away from its core linear TV broadcasting business to aggregate premium video content on online platforms like Stack TV and Magnolia Network Canada, while also having ushered Pluto TV into the Canadian market.

The latest international launch for the Paramount free, ad-supported online video channel comes as Canadian TV viewers grapple with rising subscription costs and more subscription video offerings than ever north of the border to compete against Netflix and other streaming giants.

Corus, like other Canadian TV networks, has seen a dramatic drop in advertising revenues during the pandemic and as a recessionary threat looms, while programming costs continue to climb. The Canadian media player purchased a 50 per cent stake in Toon Boom in 2004 and acquired the remaining 50 per cent holding in 2012.

IMC’s proposed deal to acquire Toon Boom is expected to close by the end of 2023, pending regulatory approvals. LionTree Advisors advised Corus on the Toon Boom Animation deal, while Weil, Gotshal & Manges LLP and Davies Ward Phillips & Vineberg LLP served as legal counsel to IMC.

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