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Comcast (CMCSA) Wraps Up DreamWorks Animation Buyout
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NBCUniversal, a leading media and entertainment company and a division of Comcast Corp. (CMCSA - Free Report) , completed its acquisition of DreamWorks Animation, a global family entertainment company with interests in film and television production, licensing and consumer products, location-based entertainment and new media properties. This deal will help Comcast strengthen its position in the sphere of kids and family entertainment and compete against rivals like The Walt Disney Company (DIS - Free Report) , Time Warner Inc. and Viacom Inc. .
The Deal
NBCUniversal purchased DreamWorks Animation in a deal worth $3.8 billion, wherein the stockholders of DreamWorks Animation was paid $41 in cash for each share of the company’s common stock. The studio will now be a part of the Universal Filmed Entertainment Group, which includes Universal Pictures, Fandango and NBCUniversal Brand Development.
On Sep 21, 2016, DreamWorks Animation will redeem the $300 million principal amount outstanding of its 6.875% Senior Notes due Aug 15, 2020 at a redemption price of 105.156% of the principal amount, including accrued and unpaid interest but excluding the date of redemption.
Growth Prospects
The acquisition should boost NBCUniversal’s entertainment offerings, which will now include DreamWorks Animation’s cartoon characters. Comcast’s business of theme parks, children’s television programming and merchandising holdings should also get a boost. The integration is expected to help the studio release four major animated films annually, thus competing against Walt Disney Studios in the animation space. NBCUniversal expects DreamWorks Animation to help it expand its film, television, theme parks and consumer products businesses in the future.
DreamWorks Animation’s Prior Deals
Alphabet Inc.’s (GOOGL - Free Report) video-sharing site YouTube and DreamWorks’ AwesomenessTV signed an agreement to release several feature films on the website in the upcoming years. Moreover, DreamWorks strengthened its multi-year global licensing deal with Netflix Inc. (NFLX - Free Report) . The agreement says that a number of new original series will be created and produced by DreamWorks Animation for Netflix and such partnerships are expected to drive the company's top line while moving ahead.
DreamWorks has also taken several measures to improve the film making process to cut down production costs. Since Nov 2013, average film production expenditure has come down significantly. Management is hopeful that production costs will further reduce following the implementation of new techniques.
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Comcast (CMCSA) Wraps Up DreamWorks Animation Buyout
NBCUniversal, a leading media and entertainment company and a division of Comcast Corp. (CMCSA - Free Report) , completed its acquisition of DreamWorks Animation, a global family entertainment company with interests in film and television production, licensing and consumer products, location-based entertainment and new media properties. This deal will help Comcast strengthen its position in the sphere of kids and family entertainment and compete against rivals like The Walt Disney Company (DIS - Free Report) , Time Warner Inc. and Viacom Inc. .
The Deal
NBCUniversal purchased DreamWorks Animation in a deal worth $3.8 billion, wherein the stockholders of DreamWorks Animation was paid $41 in cash for each share of the company’s common stock. The studio will now be a part of the Universal Filmed Entertainment Group, which includes Universal Pictures, Fandango and NBCUniversal Brand Development.
On Sep 21, 2016, DreamWorks Animation will redeem the $300 million principal amount outstanding of its 6.875% Senior Notes due Aug 15, 2020 at a redemption price of 105.156% of the principal amount, including accrued and unpaid interest but excluding the date of redemption.
Growth Prospects
The acquisition should boost NBCUniversal’s entertainment offerings, which will now include DreamWorks Animation’s cartoon characters. Comcast’s business of theme parks, children’s television programming and merchandising holdings should also get a boost. The integration is expected to help the studio release four major animated films annually, thus competing against Walt Disney Studios in the animation space. NBCUniversal expects DreamWorks Animation to help it expand its film, television, theme parks and consumer products businesses in the future.
DreamWorks Animation’s Prior Deals
Alphabet Inc.’s (GOOGL - Free Report) video-sharing site YouTube and DreamWorks’ AwesomenessTV signed an agreement to release several feature films on the website in the upcoming years. Moreover, DreamWorks strengthened its multi-year global licensing deal with Netflix Inc. (NFLX - Free Report) . The agreement says that a number of new original series will be created and produced by DreamWorks Animation for Netflix and such partnerships are expected to drive the company's top line while moving ahead.
DreamWorks has also taken several measures to improve the film making process to cut down production costs. Since Nov 2013, average film production expenditure has come down significantly. Management is hopeful that production costs will further reduce following the implementation of new techniques.
Comcast currently has a Zacks Rank #3 (Hold).
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