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Entertainment One acquires studio behind Designated Survivor, Grey's Anatomy
Peppa Pig owner Entertainment One has agreed to acquire the remaining 49% share of the Mark Gordon Company following the successful performance of the business so far, with TV guru Mark Gordon to join the London-listed company as president and chief content officer.
The MGC studio's acquisition, which is expected to boost earnings 2% in its first full year, will cost eOne a total sum of $209m, made up of $160m cash and $49m of shares. This represents a takeover multiple of just under nine times consensus EBITDA.
A £53m ($75m) placing will part-finance the deal, with the remainder expected to be financed by issuing new debt.
In the 2017 financial year, with 51% of MCG owned by eOne, the studio's revenue surged to £119.9m from £14.6m in 2016, growing 721%.
In the six months ended 30 September 2017, MGC's unaudited revenue was £51.6m compared to £28.3m in the equivalent period in 2016, growing by 82%, with unaudited underlying EBITDA of £9.9m up 10% from £9.0m. As of 30 September 2017, MGC had unaudited gross assets of £210.6m.
Directors of eOne believe the acquisition "will further strengthen the company's position as a leading global content business" as it transitions its operating structure to unify its film and television operations into a single division, a process that the board believes will be further facilitated by the acquisition.
MGC is currently in production on several established TV series including 'Ray Donovan' for Showtime, 'Grey's Anatomy' for ABC, 'Criminal Minds' for CBS, and also serves as the lead studio for the 'Designated Survivor' series starring Kiefer Sutherland and a pilot for 'Las Reinas' in production for ABC.
Commenting on the acquisition, eOne chief executive, Darren Throop, said the acquisition was "an exciting time" for both parties "and a natural step in our strategy of creating and owning high quality content".
"We would like to welcome Mark Gordon into his new and expanded role with eOne and look forward to seeing our Television and Film operations continue to make great progress under his leadership."