National Bank Reviews CJR's Toon Boon Animation Sale2023-07-14 12:43:57 PM ET (MT Newswires)
2:43 PM EDT, 07/14/2023 (MT Newswires) -- Corus Entertainment announced the sale of Toon Boom Animation this week for $147.5 million.
Toon Boom Animation (TBA) was founded in 1994 and acquired in two 50% tranches by Corus in 2004 and 2012 for about $5 million. The sale of TBA to Integrated Media Company, a TPG platform dedicated to the new media ecosystem, will yield net proceeds of $142 million to Corus.
National Bank estimates that revenues were about $30 million within the Other line of TV and EBITDA was around $15 million. The deal is expected to close later in 2023.
The out-of-the blue sale is a pleasant surprise, writes analyst Adam Shine, given that leverage was too high and Corus was struggling with cyclical pressures adding to secular top-line challenges and margins further exacerbated by catch-up CanCon spending. Shine sees leverage moving down from an unchanged level of 3.71x in f2023E to 2.74x in f2024E.
Reiterate Sector Perform, $2 price target.