Hong Kong animation company Imagi International is buying mainland Chinese shingle Toon Express Group, which owns the popular Chinese animation brand “Pleasant Goat and Big Big Wolf,” for up to $130 million.
The acquisition will allow Imagi to broaden its revenue, provide complimentary skills, bring experienced management and allow it to sell its other properties through Toon Express’s relationships, Imagi said in a statement to the stock exchange.
Toon Express has key commercial agreements with two contractual partners, Creative Power Entertaining LLC (CPE) and Disney Enterprises, Inc (Disney).
The structure of the transaction sees Imagi paying an initial $105 million in cash and the rest through the issue of consideration shares. Another $30 million will be in the form of promissory notes dependent on Toon Express’ performance over the next two years, which means the total could be up to $130 million.
Imagi, which incurred major losses over the disappointing performance of the “Astro Boy” movie, underwent a root-and-branch restructuring last year to restore its financial health and clear its debt.
The “Pleasant Goat” franchise has been a big hit in China. The first instalment took $12 million, “Pleasant Goat and Big Big Wolf — Desert
Trek: The Adventure of the Lost Totem” took $19.4 million and the third part “Moon Castle — The Space Adventure” has already taken $22.8 million in the mainland.