Founding CEO Vince
Commisso & 9 Story Leadership Team to Join with
Scholastic and Continue Leading State-of-the-Art, Premium
Children's Content Production Facilities in Toronto, Dublin & Bali and Global
Distribution and Licensing Teams
NEW
YORK and TORONTO,
March 12,
2024 /PRNewswire/ -- Scholastic
(NASDAQ: SCHL), the global children's publishing, education
and media company, today announced it has signed a definitive
agreement to invest in 9 Story Media Group. Through the investment,
Scholastic will acquire 100% of the economic interest in and a
minority of voting rights in 9 Story Media Group ("9 Story"), a
leading independent creator, producer and distributor of premium
children's content, for approximately USD $186 million, subject to customary closing
adjustments.
The strategic investment in 9 Story's team and best-in-class
production, sales and licensing capabilities significantly expands
Scholastic's opportunities to leverage its trusted brand,
best-selling publishing and beloved global children's franchises
across print, screens and merchandising. Today's announcement
solidifies a long-time collaboration between Scholastic
Entertainment, the company's successful and award-winning media
development and production division, and 9 Story®, which includes
the animated series reboot of "Clifford the Big Red Dog®" on PBS Kids and
Amazon Prime Video and production of "Eva the OwletTM"
on Apple TV+®.
"This highly strategic combination, adding 9 Story's
industry-leading capabilities with Scholastic's trusted brand and
proven ability to create iconic children's series and franchises,
has tremendous potential to build deeper connections with young
people through our stories, as the pages of our books come to life
on screens and through merchandising. At its core,
Scholastic's 360° content creation strategy is about engaging
children with reading, and we have introduced our stories to
generations of kids by reaching them where they are," said
Peter Warwick, Scholastic President
and Chief Executive Officer. "We are thrilled to build upon
our more than 20-year relationship with 9 Story's exceptional
management team and employees, whose culture and values could not
be better aligned with our own."
Iole Lucchese, Scholastic Board
Chair and President, Scholastic Entertainment, added, "By bringing
together Scholastic's knowledge of what kids love and our proven
track record of successful media development with 9 Story's
top-rated global production, distribution and licensing
capabilities, I am confident we can meet the continued, strong
demand for high-quality kids and family entertainment.
Today's announcement presents a huge opportunity to expand the
footprint of Scholastic's authors and illustrators and to build
global franchises on every platform, creating more value for the
creators and for our shareholders."
9 Story's business divisions include Brown Bag Films, the
award-winning animation studio, which has won 21 Emmy® Awards and
two Oscar® nominations; 9 Story Distribution International,
the global distribution division, which represents more than 5,000
half-hour episodes of 2-D and 3-D animated and live action
programming for kids, including "Clifford the Big Red Dog®" and "A Kind of
SparkTM"; and 9 Story Brands, the consumer
products division, which builds global kids' brands both on- and
off-screen, including "Daniel
Tiger's Neighborhood®," "Karma's World®" and "Super
Why®." 9 Story has strong momentum, recently announcing a
significant deal with Crayola Studios to handle production and
distribution on all new, original projects, as well as the
acquisition of Portfolio Entertainment's library, production slate,
and development projects, which added more than 550 half-hours of
content.
Vince Commisso, President and
Chief Executive Officer, 9 Story, said, "We've been fortunate to
work with Scholastic for decades, going back to my own start with
the family-favorite production, 'The Magic School Bus®.' The
combination of our global studios, sales and distribution
capabilities with Scholastic's existing media business, iconic name
and unique capabilities opens even more opportunities to deliver
compelling stories and build impactful brands for audiences
worldwide. We're eager to begin bringing together our
complementary talents to enhance Scholastic's position as a top
developer, producer and distributor of kids and family
content."
Scholastic Entertainment was rebooted under Lucchese's
leadership in 2017, recognizing the untapped potential of
Scholastic's engaging children's content. Since then, the
development and production division has rapidly become an
award-winning and highly profitable business, most recently
announcing production of a second season of the live-action
"Goosebumps®" series for Disney+® and Hulu®.
Investment Details
Under the terms of its definitive agreement with 9 Story,
Scholastic will acquire 100% of the economic interests and a
minority of voting rights in 9 Story for approximately USD
$186 million, subject to customary
purchase price adjustments.
The investment has been approved by both companies' boards of
directors and the shareholders of 9 Story. Subject to receipt
of a satisfactory opinion by the Minister of Canadian Heritage and
other customary closing conditions, the transaction is expected to
close in Scholastic's fiscal 2025 first quarter, which begins on
June 1, 2024. Scholastic
intends to initially fund the transaction from its available cash
and its revolving credit facility and anticipates maintaining its
regular dividend and its authorized stock repurchase program.
9 Story recorded revenue of approximately USD $104 million in its most recent fiscal year,
ended August 31, 2023.
Scholastic expects the addition of 9 Story to contribute long-term
earnings accretion, reduce the capital intensity of production and
drive substantial improvements in top-line growth and bottom-line
results through 9 Story's existing content library, best-in-class
production studios, and global distribution and licensing
capabilities.
A supplemental presentation with further details on the
transaction and its strategic rationale is available at:
https://investor.scholastic.com/static-files/63124374-a18e-494a-8558-01ec19353f0a
About Scholastic
For more than 100 years, Scholastic
Corporation (NASDAQ: SCHL) has been encouraging the personal
and intellectual growth of all children, beginning with literacy.
Having earned a reputation as a trusted partner to educators and
families, Scholastic is the world's largest publisher and
distributor of children's books, a leading provider of literacy
curriculum, professional services, and classroom magazines, and a
producer of educational and entertaining children's media. The
Company creates and distributes bestselling books and e-books,
print and technology-based learning programs for pre-K to grade 12,
and other products and services that support children's learning
and literacy, both in school and at home. With international
operations and exports in more than 135 countries, Scholastic makes
quality, affordable books available to all children around the
world through school-based book clubs and book fairs, classroom
libraries, school and public libraries, retail, and online. Learn
more at www.scholastic.com.
About Scholastic Entertainment
Scholastic Entertainment brings high-quality content across
multiple platforms to audiences of all ages. Among its
award-winning productions are the animated series "Clifford the Big Red Dog®" for Amazon Prime
and PBS Kids, a live-action "Clifford the Big Red Dog®" feature for
Paramount, and Peabody and Daytime Emmy® Award-winning
"Stillwater®," an animated series for Apple TV+. Scholastic
Entertainment continues to build celebrated brands worldwide by
bringing both nostalgic Scholastic properties and exciting new
voices to the screen. Some of its recent projects include "Eva the
OwletTM," an animated series for Apple TV+ based on the
New York Times bestselling Scholastic
book series Owl DiariesTM, the hit live-action
"Goosebumps®" series, which was recently picked up for a second
season, with Disney+ and Hulu, and a live-action feature adaptation
of "The Magic School Bus" in development with Elizabeth Banks and Marc
Platt. Scholastic Entertainment is the media division of
Scholastic Corporation (NASDAQ: SCHL).
About 9 Story Media Group
9 Story Media Group is a leading creator, producer and
distributor of premium, kids and family-focused content. Its
award-winning animation studio, Brown Bag Films, is recognized
around the world for best-in-class brands such as "Doc
McStuffins®," "Daniel Tiger's
Neighborhood," "Octonauts®," "Wild Kratts®," and "The
Magic School Bus Rides Again." The company's international
distribution arm, 9 Story Distribution International based in
Dublin, represents more than 5,000
half-hours of animated and live-action programming, seen on some of
the most respected international channels and platforms. Its
in-house consumer products division, 9 Story Brands, builds
international entertainment brands for kids, with expertise across
creative, brand marketing, and licensing. 9 Story's Creative
Affairs Group creates, develops, and produces award-winning branded
properties using groundbreaking formative research. With facilities
in Toronto, Dublin, New
York, and Bali, 9 Story
Media Group employs approximately 850 creative and corporate staff
worldwide.
SCHL: Financial
Forward Looking Statements Certain statements contained
in this press release may constitute "forward-looking statements"
within the meaning of the U.S. Private Securities Litigation Reform
Act of 1995. Often, but not always, forward-looking statements can
be identified by the use of words such as "plans", "expects", "is
expected", "budget", "potential", "scheduled", "estimates",
"forecasts", "intends", "anticipates", "believes", or "projects",
or the negatives thereof or variations of such words and phrases or
statements that certain actions, events or results "will",
"should", "may", "could", "would", "might" or "will be taken",
"occur" or "be achieved" or the negative of these terms or
comparable terminology. All statements other than statements of
historical fact, including those that express, or involve
discussions as to, expectations, beliefs, plans, objectives,
assumptions or future events or performance, including any
synergies expected to be achieved by Scholastic from the investment
in 9 Story Media Group Inc., are not historical facts and
constitute forward-looking statements involving estimates,
assumptions and uncertainties that could cause actual results or
outcomes to differ materially from those expressed in such
forward-looking statements. Such statements reflect Scholastic's
current views and intentions in respect to future events, arrived
at based on current information available to Scholastic, and are
subject to risks, uncertainties and assumptions as referred to
above. Many factors could cause the actual results, performance or
achievements that may be expressed or implied by such
forward-looking statements to vary from those referred to herein
should one or more of these risks or uncertainties materialize,
including those risk factors discussed or referred to in
Scholastic's disclosure documents filed with the U.S. Securities
and Exchange Commission (the "SEC") available on the SEC's website
at www.sec.gov, including Scholastic's most recent Annual Report on
Form 10-K and quarterly report on Form 10-Q.
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SOURCE Scholastic Corporation