Canadian firm cuts debt load by selling Peanuts

DHX Media Ltd. said Monday the sale of nearly half of its stake in the Peanuts entertainment business to a Sony Corp. division for $237 million in cash will help reduce the Canadian animation company's debt load and improve its operating results.

The Halifax-based company will retain 41 per cent of the Peanuts empire, which revolves around characters such as Snoopy, Charlie Brown and Lucy Van Pelt, while Sony Music Entertainment (Japan) Inc. will own 39 per cent. The family of creator Charles M. Schulz will continue to own 20 per cent.

DHX shares plunged Monday after the company also announced a quarterly loss and said it may not achieve its previously-announced guidance for fiscal 2018. The stock closed down 87 cents to $3.37 per share. DHX executive chairman Michael Donovan said Monday Sony is paying a 25 per cent premium over what DHX Media paid last year and it will help the Canadian company build the Peanuts brand in Asia.

Sony acquired rights to the Peanuts franchise in Japan in 2010. Its success in building Peanuts in Japan “provides a template for success in other markets, particularly other Asian markets, particularly China.”

Snoopy and other Peanuts characters are extremely popular in Japan.

Peanuts began as a comic strip in 1950. It’s now carried in 2,200 newspapers around the world in 21 languages. In 2020, it will celebrate its 70th anniversary. Schulz died in 2000.

The comic series was translated into Japanese decades ago, becoming an instant hit.

Donovan said in an interview that “there's great knowledge and advantage to be gained from that partnership, not only in China, Japan and but throughout Asia.”

The transaction will reduce its debt load “as we team up with an ideal partner to help us reach our worldwide growth targets for Peanuts in the coming years,” Donovan said.