Scholastic Corp. is making a $186 million investment in children’s entertainment mainstay 9 Story Media Group.
With operations in Toronto, Dublin, New York and Bali, 9 Story Media Group has 850 creative and corporate employees. Its divisions include animation studio Brown Bag Films, the maker of titles like Doc McStuffins, Daniel Tiger’s Neighborhood, Octonauts, Wild Kratts and The Magic School Bus Rides Again.; 9 Story Distribution International, which reps kids series like Clifford the Big Red Dog and A Kind of Spark; and consumer products unit 9 Story Brands.
The transaction builds on 20-year ties between Scholastic Entertainment and 9 Story Media Group. They have recently teamed on the animated series reboot of Clifford the Big Red Dog on PBS Kids and Amazon Prime Video and production of Eva the Owlet on Apple TV+.
Under the terms of the deal, Scholastic will acquire 100% of the economic interests and a minority of voting rights in 9 Story. The investment has been approved by both companies’ boards of directors and the shareholders of 9 Story. Subject to sign-off by the Minister of Canadian Heritage and other closing conditions, the transaction is expected to close in Scholastic’s fiscal 2025 first quarter, which begins on June 1.
Revenue in 9 Story’s most recent fiscal year, which ended August 31, 2023, totaled $104 million. Scholastic sees the investment helping its long-term earnings, lowering its production expenses and offering new opportunities via 9 Story’s global distribution and licensing capabilities.
Scholastic said it will initially fund the transaction from its available cash and its revolving credit facility, and the company expects to maintain its regular dividend and stock buyback program.
“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,” Scholastic CEO Peter Warwick said.
Vince Commisso, President and CEO of 9 Story, said the combination of assets “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.”