The annual run rate synergies can reach $130 million by 2022, said Hasbro (Image via: WJAR)whwh

Brand Expansion; Hasbro to Acquire Entertainment One For £3.3bn

An announcement just came out from Hasbro that the company is working on the deal with Entertainment One for £3.3bn. This is a big amount because 1 British pound equals $1.2249. The deal requires Hasbro to pay 5.60 pounds per share. Hasbro will also finance the deal with debt and $1.0 billion to $1.25 billion in cash from equity financing. The deal is expected to close by the end of the year.

Entertainment One is the owner of popular animated brands, including Peppa Pig, PJ Masks, and Ricky Zoom. On the other hand, Hasbro is a solid player as well in toymaker industry by owning the best brands, including My Little Pony, Transformers, Play-Doh, Monopoly and Power Rangers. Brian Goldner, the CEO of Hasbro, said that the company promises to improve Entertainment One’s immersive entertainment capabilities. The agreement between both sides will give Hasbro benefit in return as it can expand its brands portfolio. The brand expansion will be the gold for Entertainment One as well.

The deal will also bring benefit based on the good sales from both companies. Entertainment One’s sales are forecast to rise for more than 10% on this year and the next. Meanwhile, a good prediction of Hasbro’s sales is 9% this year and 4% in next year. However, Hasbro is still recovering from the bankruptcy of its key customer, Toys R Us. Hasbro’s operating income decreased 26% in 2018 as the impact. Entertainment One has a better luck in profit as its operating income increased 11% in the last financial year. Despite all of it, it will be a win-win situation for both companies, considering the impact they have in business world.