Peppa Pig in £140m deal, set to become even bigger global sensation
Published 01/10/2015 | 15:36
Peppa Pig is about to become an even bigger global sensation following plans by joint-owner Entertainment One to boost its stake in the brand and introduce Britain's favourite pink porker to new markets.
The FTSE 250 entertainment group has agreed to buy 70pc of Astley Baker Davies, the creator and producer of Peppa Pig, with which it jointly holds the rights to the hit children's cartoon.
The acquisition will increase Entertainment One's interest in Peppa Pig from 50pc to 85pc, while ABD will become a subsidiary of the film and television company.
The £140m (€170m) buy-out will be funded through a four-for-nine rights issue to raise £193.6m, with the balance used to pay off debt.
The acquisition means that Astley Baker Davies - Neville Astley, Mark Baker and Phil Davies - who created and produce Peppa Pig and are also the team behind Ben & Holly's Little Kingdom, are in for a windfall.
Mr Astley and Mr Baker began collaborating 1994 and have since written more than 100 Peppa Pig episodes.
Darren Throop, chief executive of Entertainment One, said the deal was good news for shareholders as Peppa Pig offered huge growth potential.
"There is a significant growth opportunity in the continued exploitation of Peppa Pig by entry into new markets, including continued expansion into the US, as well as further content and merchandising exploitation opportunities," he said, adding that the acquisition was also part of the its longer-term strategy to double the size of the business over five years.
"Peppa Pig has become a worldwide success and reflects the strength of our 10-year partnership working with ABD. Already the number-one pre-school property in the UK, Australia, Spain, Mexico and Brazil, and a leader in other territories around the world, the growth opportunities for Peppa Pig are big."
But despite its global success, there are still several countries in which Peppa remains an unknown figure.
The cartoon has only just launched in China with a TV show. Given Chinese consumers' general fondness for pigs, it's likely to go down well.
Mr Throop believes the group can double retail sales generated by the pink cartoon porker, which currently stand at around $1bn a year. The lion's share of sales are royalties paid by licensees across a number of categories, such as toys, clothing and DVDs.
The acquisition follows speculation last month that Entertainment One was being offered for sale to media giants including Sky and Vivendi as its investors seek to capitalise on strong global demand for content rights.
Advisers to the FTSE 250 company were approached by potential bidders in recent months, according to sources.