Scholastic is boosting its entertainment biz: The kids media and publishing company announced a $186 million deal to acquire full economic interest in 9 Story Media Group, a leading children’s content producer and distributor.
Through the investment, Scholastic will acquire 100% of the economic interest in and a minority of voting rights in 9 Story Media, the animation studio behind TV shows including “Doc McStuffins” (pictured above), “Daniel Tiger’s Neighborhood,” “Octonauts,” “Wild Kratts” and “The Magic School Bus Rides Again.”
The companies said the deal “solidifies” the more than two decades of collaboration between Scholastic Entertainment and 9 Story. The investment has been approved by both companies’ boards of directors and the shareholders of 9 Story. The deal is expected to close in Scholastic’s fiscal 2025 first quarter, which begins on June 1, 2024, subject to customary closing conditions.
“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,” Peter Warwick, Scholastic’s president and CEO, said in announcing the pact.
9 Story’s divisions include award-winning studio Brown Bag Films; 9 Story Distribution International, which represents more than 5,000 half-hour episodes of animated and live-action programming for kids, including “Clifford the Big Red Dog” and “A Kind of Spark”; 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 recently announced a deal with Crayola Studios to handle production and distribution on 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.
“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,’” Vince Commisso, President and Chief Executive Officer, 9 Story, said in a statement. “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.”
9 Story reported revenue of $104 million in its most recent fiscal year, ended Aug. 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.” Scholastic said it intends to initially fund the transaction from available cash on hand and its revolving credit facility and “anticipates maintaining its regular dividend and its authorized stock repurchase program.”
9 Story Media operates facilities in Toronto, Dublin, New York and Bali, employing approximately 850 creative and corporate staff worldwide.
