Deals



Entertainment One Ltd Acquires The Mark Gordon Company


Posted: 6th January 2015 08:44

Entertainment One Ltd. today announces that it has entered into an agreement to acquire a 51% stake in The Mark Gordon Company ("MGC") creating an independent studio joint venture that will produce and finance premium television and film content for the major US networks and international distribution. The deal includes the rights owned by MGC to its existing television and film library as well as its current and future production pipeline. eOne will distribute new content created by the joint venture, subject to existing contractual commitments.

The partnership unites one of the world's most successful television and film producers with eOne's extensive international distribution network to create a leading television and film production company with global reach. Under the terms of the agreement, eOne will acquire 51% of MGC from The Mark Gordon Revocable Trust for consideration of US$132.6 million, comprising US$127.5 million in cash and US$5.1 million in eOne shares (based on a 30-day volume weighted average share price) payable on completion of the deal, with the opportunity to acquire the remaining 49% after an initial seven-year term.

Mark Gordon, who founded MGC in 1987, is an award-winning film and television producer with an outstanding track record of hits, including high quality television shows Grey's Anatomy (228 episodes), Criminal Minds (221 episodes) and Ray Donovan (36 episodes). MGC has also produced critically-acclaimed box office successes, including Speed, 2012, The Day after Tomorrow, Saving Private Ryan, The Patriot andSource Code. Mark Gordon brings to the venture deep active relationships with leading creative talent and all the major US studios and networks.

The transaction will be financed through a US$175 million extension to the Company's existing banking facility and is expected to be earnings enhancing for the Group in the first full year of the investment. In the year ended 31 December 2013, MGC reported net income of US$13.2 million, adjusted EBITDA of US$30.0 million and gross assets of US$3.4 million. As part of the joint venture agreement, Mark Gordon has entered into a new long term employment agreement with MGC.

Darren Throop, President and Chief Executive Officer of Entertainment One said:
 
"We are delighted to enter into this partnership with Mark and his team. Mark brings a wealth of experience and talent to the table. The Mark Gordon Company creates first-class content that has been entertaining audiences around the world for many years and is the first significant acquisition for eOne since the launch of our new strategy to partner with world leading creative talent to bring the best content to the world. The business will continue to operate as it does today and we are delighted to welcome MGC into the wider eOne family."
 
Mark Gordon, Founder and Chief Executive Officer of The Mark Gordon Company said:
 
"This is a great development for our business. There is a voracious appetite for premium original content worldwide. In order to realise the true value of our content, retention of rights ownership and control of international distribution are absolute musts. In eOne, we have found a partner that focuses on the creative, is deeply immersed in the international marketplace and has great ambitions in the US that will keep our business booming over the next many years. We're building an alternative to the traditional studio way."

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