DHX buys Epitome

DHX Media has acquired Epitome, the Canadian production company behind the Degrassi teen drama franchise, for C$33m (US$30m).

Michael Donovan

The deal includes C$19.5m in cash and almost three million DHX shares. The shares are subject to a six-month lock-up agreement. Stephen Stohn and Linda Schuyler will continue to be Epitome’s president and exec producer, respectively.

The agreement covers Epitome’s library of 469 half-hours of the Degrassi franchise, 216 half-hours of other Epitome series and Epitome Studios in Toronto. Other Epitome shows include dramas The LA Complex (19×60′), Instant Star (52×30′), Riverdale (47×60′) and Liberty Street (28×30′).

“The Degrassi franchise has become a perennial favourite with teens around the world since its inception in 1980,” said Michael Donovan, CEO of DHX. “With Degrassi’s enduring international appeal and suitability for digital broadcast, this iconic Canadian show represents a highly complementary addition to our library.”

For the year ended May 2013, Epitome generated revenues of C$24.4m and EBITDA of C$6.6m. Epitome is currently in production on the 14th season of Degrassi: The Next Generation for MTV in Canada and TeenNick in the US. The franchise also includes The Kids of Degrassi Street, Degrassi Junior High and Degrassi High.

The deal continues an acquisition spree at DHX. The Halifax, Nova Scotia-based firm is set to pay C$170m (US$160m) to acquire Family Channel, Disney XD and Disney Junior in Canada from former owners Bell Media. The deal is pending approval by the Competition Bureau and the Canadian Radio-television & Telecommunications Commission (CRTC).

Last year, DHX acquired Teletubbies owner Ragdoll Worldwide from BBC Worldwide and founder Anne Wood for US$27.7m, while its deal for Cookie Jar Entertainment in 2012 turned it into Canada’s largest independent children’s entertainment group.