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Mergers and Acquisitions: Moonbug Acquired By Unnamed Media Company

By Gary Symons

TLL Editor in Chief

Huge news for the children’s animation studio Moonbug Entertainment, as the company has been acquired by a media venture run by former Disney execs Kevin Mayer and Tom Staggs.

The valuation of the deal was not revealed by the media group, but people familiar with the negotiations have said it was worth between $2.75 billion to $3 billion when earn-out incentives are included. The deal was backed by Blackstone, a large US private equity firm.

What is truly extraordinary about this deal is the speed with which Moonbug became a multibillion dollar property. The company was founded in 2018, and since then it has very quickly built a global audience with shows like CoComelon, Blippi, Little Baby Bum, and many others. Their content appears in 27 languages on more than 100 platforms around the world such as YouTube, Netflix, Hulu, HBO, Amazon and Sky.

Moonbug shows promote healthy values like compassion, empathy and resilience to kids around the world, and that messaging has clearly caught on in a big way. Moonbug’s CoComelon is currently the second-most subscribed YouTube channel with approximately 120 million subscribers globally and the most-watched kids show on Netflix.

Moonbug has also become a major presence in the global licensing industry. it has a toy agreement with Character Options, a music deal with Universal, and CoComelon branded products were awarded the coveted prize of Top Toy for 2021 by Licensing Global.

Not surprisingly, given their remarkable success in building the young company, Moonbug’s founders CEO René Rechtman and COO John Robson as well as the existing management team and shareholders will retain equity stakes in the still-unnamed Mayer/Staggs/Blackstone media company.

Rechtman said the deal is also about partnering with a company that holds a similar vision for the future of Moonbug programming. “John and I have built a category-leading, digital-first kids entertainment business based on strong values and content that is focused on digital platforms,” Rechtman explained. “Our vision is to build global family franchises, which is wholly aligned with Kevin and Tom’s vision and experience. I have had the pleasure of working with them both earlier in my career and am thrilled to be reunited to build the next global powerhouse of entertainment. You could not find stronger partners in our industry.”

In a statement, Kevin Mayer and Tom Staggs said the deal wasn’t just about the success of Moonbug, but about the people leading the team.

“We have known René and his innovative team for years, including during our time together at Disney, and they have built a perfect example of the type of category-defining business we are looking to bring into our company,” they said. “They know how to identify and support brands that are beloved by millions of families across the globe. We and our partners at Blackstone look forward to helping expand Moonbug’s portfolio of titles and further extend its franchises across digital platforms and key licensing and merchandising channels.”

This deal marks the second major acquisition for Mayer and Staggs’ new media company, following the Blackstone backed acquisition of Reese Witherspoon’s mission-driven media company that puts women at the center of every story it creates.

Joe Baratta, Global Head of Private Equity at Blackstone, and David Kestnbaum, a Senior Managing Director at Blackstone, said, “We are thrilled to partner with René, John, and the impressive Moonbug team. They deeply understand the fast-changing digital media environment and have rapidly established Moonbug as a digital-native powerhouse in children’s entertainment. We are excited to help fuel their continued expansion in the years ahead.”

Blackstone’s investment is being made through funds affiliated with the firm’s flagship private equity business. Blackstone invests heavily in the entertainment business, as well as online platforms.

Among those, Blackstone has invested in the music industry through the leading music rights organization SESAC; in a music rights investment partnership with Hipgnosis Song Management; and in Epidemic Sound, which delivers music to internet content creators across the globe. Hipgnosis has been covered several times in The Licensing Letter, as it has become one of the leading owners of music franchises. 

Blackstone has also invested in Merlin Entertainments, a European firm that is the world’s second largest theme park operator, and in the water park operator Great Wolf Resorts. it holds a large portfolio of studio space in both Hollywood and London, a large stake in Ancestry.com, and also in the online mobile ad platforms Vungle and Liftoff.

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