Genius Brands to acquire Wow! Unlimited for C$66 million

American children’s entertainment company Genius Brands is looking to acquire Canada’s Wow! Unlimited in a deal for C$66 million (US$53 million) in cash and stock. Genius expects the acquisition to create “a global animation powerhouse” and aid in the development of new IP, social media distribution and production capabilities. To that end, Genius has confirmed it will move its animation pipeline out of China to Canada so it can take advantage of local subsidies. Wow’s Canadian operations will continue as distinct Canadian-controlled business to ensure access to that funding.
Genius Brands was founded in 2013 through the merger of Andy Heyward’s A Squared Entertainment and Pacific Entertainment’s Genius Brands. The company is perhaps best known for its Rainbow Rangers and Lama Lama preschool series. It also operates the Kartoon Channel ad-supported streaming service. Wow! Unlimited was founded in 2016 through the merger of Canadian animation studio Rainmaker (now back to being known as Mainframe) and the American Frederator company with Michael Hirsh (who previously co-founded Nelvana and Cookie Jar) as CEO. The company has produced series like Netflix’s Castlevania, Bee and Puppycat, ReBoot: The Guardian Code and Barbie Dreamhouse Adventures, among others. It also operates Frederator Networks, a YouTube management network with over a billion views per month.
Michael Hirsh, Chairman and Chief Executive Officer of WOW!, commented, “I’m excited to work with Andy and the Genius Brands team. This is a powerful partnership that brings immediate and significant value for shareholders. We bring production capacity, new IP, and a robust and profitable YouTube Network with over a billion views per month. Genius Brands, with Kartoon Channel!, has a fully distributed footprint where our content can thrive and also help Kartoon Channel! itself expand. Genius Brands’ world-class consumer product licensing team led by Kerry Phelan, will enable us to monetize all of these great characters and brands. This transaction represents the culmination of our extensive strategic review process. We feel that this is a very attractive opportunity for our shareholders with significant potential upside in the months and years ahead.”