Cinar Purchase May Lead Trend in Kids TV

Nov 3, 2003  •  Post A Comment

Last week’s acquisition of Canadian children’s TV animation producer Cinar by an investor group could be the tip of the iceberg for the future of the kids “edutainment” industry.
Michael Hirsh and Toper Taylor-former executives of Nelvana, Cinar’s leading competitor-and the private fund TD Capital completed their deal Oct. 30 to acquire Cinar for $143.9 million. Now the group has set its sights on acquiring “three or four” more companies in a move to consolidate the international children’s animation and education businesses, Mr. Taylor said.
“We believe now is the time for another healthy growth of the kids business, working alongside our friends at Chorus/Nelvana and Alliance Atlantis,” Mr. Taylor said. “We are looking at Cinar as the first of a series of potential acquisitions of companies that focus on kids entertainment and education. If we continue to support consolidation in that marketplace, we believe we can become the most important edutainment company in the world in very short order.”
Mr. Hirsh and Mr. Taylor joined with TD Capital to finance the deal, which was unanimously approved Thursday by Cinar’s board of directors. The investor group will acquire 100 percent of the outstanding variable multiple voting and limited voting shares as Cinar shifts from public to private company. Cinar is best known for kid’s properties such as “Arthur” and “Caillou.”
“We are happy to be working with Michael Hirsh and Toper Taylor, highly respected veterans of the entertainment industry, and believe that they have the requisite experience and skills to build on Cinar’s history and strengths,” Joe Wiley, managing director of TD Capital Canadian Private Equity Partners, said in a statement. “We’re also very excited about the potential for the company’s education business.”
Cinar has been troubled in recent years by corporate scandals, but Mr. Taylor believes that under new management the ship can be righted.
“We are going to create a strong, reliable financial port that is going to create a stronger Cinar by injecting some cash into the business,” he said.
Completion of the deal is subject to approval by two-thirds of the holders of variable multiple voting shares and limited voting shares, with each class voting separately. It is also subject to legal approval in the courts and requires regulatory approval in both Canada and the United States.