DHX Media and Entertainment One join forces

Deal values DHX at $1.59 per share; key senior managers to remain.
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International producer and distributor of children's entertainment content, DHX Media has entered into an agreement to combine its business operations with those of Entertainment One.

The proposed transaction, recommended unanimously by both boards of directors, values the total issued share capital of DHX at approximately C$68 million, representing C$1.59 per share. It is intended that the combined company will be listed on both AIM and the Toronto Stock Exchange.

DHX owns a library of 2,200 half-hours of mostly children's content and to date has entered into over 1,300 separate television licence agreements with over 250 customers worldwide. It owns Decode Enterprises, Halifax Films and Studio B Productions.

E1, meanwhile, is a leading international entertainment content ownership and distribution company, with operations in Canada, the US, the UK, Holland and Belgium.

"Joining forces with E1 represents the next logical stage in the development of DHX," said Michael Donovan, CEO of DHX. "The Enlarged Group will provide DHX with access to the US and international home entertainment markets and will offer further distribution capabilities for our growing children's library."

Darren Throop, currently CEO of E1, will be appointed as CEO of the enlarged group. Key senior management of DHX will remain with the DHX business, which will form part of the Television division of the Enlarged Group, overseen by Patrice Theroux, E1 president of Filmed Entertainment.

In the year ending June 30th 2008, DHX generated revenue of C$52.5 million and a net loss of $1.0 million.

The proposed transaction is expected to be completed by the end of December and will be structured as a reverse takeover of E1 by DHX.


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