DHX MEDIA ACQUIRES STUDIO B PRODUCTIONS INC.
Halifax, NS – 4 December 2007 – DHX Media Ltd. (AIM & TSX ticker: “DHX”), a leading independent international producer and distributor of television programming and interactive content and the parent company of DECODE Entertainment and Halifax Film, has acquired all the outstanding shares in Studio B Productions Inc. (“Studio B”), a privately-owned producer of primarily proprietary children’s programming.
Vancouver-based Studio B has a current production slate of seven shows including Kid vs. Kat for YTV, Ricky Sprocket, Showbiz Boy! For Teletoon and Martha Speaks for WGBH in the United States. In addition, Studio B has a library of over 400 half-hours of children’s programming content and operates a 24,000 square foot studio with a specialty in digital and classical animation. Studio B had projected, internally prepared, unaudited net income of approximately $1.4 million for the year ended October 31, 2007 (“Fiscal 2007”) on unaudited assets of approximately $15.3 million as at the prior year ended October 31, 2006 (internally prepared unaudited asset totals as at the year ended October 31, 2007, were not available at the time of this release).
DHX Media will benefit from several new broadcaster relationships, expanded production capabilities and a greater supply of children’s programming from which it can generate future distribution revenues. Furthermore, the television series created by Studio B will contribute to DHX Media’s stated strategy of growing a significant library of children’s content from which revenues can be generated over multiple platforms.
Commenting on the transaction, Michael Donovan, Chairman and CEO, said: “We are delighted to partner with Studio B Productions as it offers DHX Media access to a growing library, significant creative and production skills, and outstanding children’s content production capabilities. This deal will leverage the strength of our distribution capabilities and will help add to our growing library of productions from which we will be able to generate recurring revenues.”
Blair Peters and Chris Bartleman, co-founders and co-CEO’s at Studio B, added: “We are very excited about this partnership. The synergies with DHX Media and specifically their international distribution group will allow us to focus on increasing our proprietary titles which will lead to significant growth in worldwide distribution potential and earnings.’’ Peters and Bartleman will continue as co-presidents to operate Studio B as a wholly-owned production subsidiary of DHX Media under four year employment contracts.
The deal terms include an initial cash payment of CAD $8 million against a total purchase price of 4.5 times the average of Studio B’s Fiscal 2007 and the year ending October 31, 2008 (“Fiscal 2008”) earnings before interest, taxes, depreciation and amortization of capital equipment (“EBITDA”) up to a maximum amount of CAD $20 million. Any further potential consideration payable by DHX Media is subject to Studio B meeting certain financial performance benchmarks for Fiscal 2007 and Fiscal 2008 and would be paid 30% in cash and 70% in shares of DHX Media.
All financial information included in this press release relating to Studio B is unaudited and has been provided to DHX Media by Studio B, which has advised DHX Media that such information has been derived from its financial statements that have been prepared in accordance with Canadian generally accepted accounting principles. DHX Media has not undertaken an audit level review of accounting practices and policies followed by Studio B to identify all differences from those followed by DHX Media, and as a result, the financial information relating to Studio B contained in this press release may differ materially from that derived from Studio B’s financial statements had they been prepared in accordance with accounting practices and policies followed by DHX Media. DHX Media has undertaken significant due diligence into material transactions of Studio B, accounting policies and procedures, economic benefits and risks in connection with this transaction.
About Studio B Productions
Headquartered in Vancouver, B.C., Canada, Studio B Productions Inc. is a leader in the field of kids’ entertainment. Studio B is the producer of popular and award-winning properties such as Ricky Sprocket – Showbiz Boy (seen on TELETOON and Nickelodeon worldwide), Being Ian™, The Amazing Adrenalini Brothers!, Class of the Titans™ and George of the Jungle, a co-production with Classic Media set to air on Cartoon Network U.S. In addition, Studio B will launch two new properties in 2008, Kid vs. Kat, an original series with YTV and Martha Speaks, a co-production with WGBH Boston. For more information, please visit www.studiobproductions.com. There is no limit to our imagination.
About DHX Media
DHX Media produces, distributes and exploits the rights for television and film programming, with a primary focus on productions for children and youth. The Company has twelve series currently in production and a feature film in post-production. There are also twelve children’s series currently in first window broadcast on multiple major cable and broadcast networks in the UK, US and Canada, including, Lunar Jim, Franny’s Feet, The Save-Ums and Naturally Sadie. DHX Media’s prime-time production slate also includes notable achievements in the comedy genre, including the award-winning Canadian prime-time comedy series This Hour Has 22 Minutes, which is produced for the CBC and is now in its 14th season.
For more information, please contact:
DHX Media Ltd.
Dana Landry – Chief Financial Officer
David A. Regan – EVP Corporate Development & Investor Relations
AIM Nominated Advisors: Canaccord Adams Limited
+44 (0) 20-7050-6500
Certain statements herein may constitute forward-looking statements, including those identified by the expressions ‘‘may,’’ ‘‘will,’’ ‘‘should,’’ ‘‘could,’’ ‘‘anticipate,’’ ‘‘believe,’’ ‘‘plan,’’ ‘‘estimate,’’ ‘‘potential,’’ ‘‘expect,’’ ‘‘intend’’ and similar expressions to the extent they relate to the Company or its Management. These statements reflect the Company’s current expectations and are based on information currently available to Management. These forward-looking statements are subject to a number of risks, uncertainties, assumptions and other factors that could cause actual results or events to differ materially from current expectations, including the matters discussed under ‘‘Risk Factors’’ contained in the Company’s prospectus dated May 12, 2006. These forward-looking statements are made as of the date hereof, and the Company assumes no obligation to update or revise them to reflect new events or circumstances.