DHX Media has inked a deal to sell 49% of its 80% interest in the Peanuts brand to Sony Music Entertainment Japan (SMEJ) for $237 million.

Following completion of the transaction, DHX will own 41% of the brand, while SMEJ will hold 39% and the members of the family of Charles M. Schulz will continue to own 20%. The deal is expected to close on June 30 pending regulatory approvals, applicable third-party consents and the execution of certain ancillary agreements.

Executive chair and CEO Michael Donovan told investors on a call on Monday that the deal is advantageous to DHX, allowing it to “remain 100% in control” while growing the brand internationally and de-levering its balance sheet.

As part of the deal, DHX also extended the length of its current licensing and syndication agency agreement in Japan with SMEJ’s consumer products division, Sony Creative Products.

Donovan said that Japan represents an area of significant opportunity for the Peanuts brand, with SMEJ having grown the Peanuts business by over 200% since it became the brand’s agent in 2010. Currently 40% of the Peanuts brand’s total business is in Japan, said Donovan, adding that the brand’s rollout in Japan can act as a template for other territories, including China, which he identified as a significant area of focus. “The key [in China] is to create the right partnership. We see China as the gamechanger for both this company, and for that brand,” he added.

The announcement of DHX’s deal to sell almost half of its interest in the Peanuts brand comes one year after the Halifax-headquartered company announced it would acquire the brand. At the time, DHX took an 80% controlling interest in Peanuts and 100% of Strawberry Shortcake for US$345 million.

Roughly five months later, following what it called “disappointing” financial results for fiscal 2017, DHX announced a strategic review of its operations. The review, which is expected to conclude by the end of the month, has already yielded significant changes. Among those was the departure of former CEO Dana Landry, who left the company in February. Then, last month, DHX revealed that president and COO Steven DeNure was to leave the company, with Josh Scherba being promoted to president and Aaron Ames being named COO.

DHX on Monday provided an update on the review, revealing that the special committee established to undertake the review is also assessing a number of other moves including “suspension of the dividend and potentially de-listing from the NASDAQ to realize cost savings.” DHX began trading on the NASDAQ Global Select Market in June 2015.

The company added that it is in advanced discussions on material licensing opportunities that it believes will be able to further reduce its debt.

In addition, the company has released its financial results for Q3 of 2018. Revenues for Q3 2018 grew 49% to $116.5 million, compared with $78.3 million a year ago. Of that revenue growth, 46% was acquisitive growth from the Peanuts and Strawberry Shortcake brands and the remaining 3% was organic growth. Meanwhile, adjusted EBITDA was $26.7 million for the quarter, with a net loss of $8 million, compared with adjusted EBITDA of $24.9 million and net income of $7.6 million in Q3 2017.

“While top- and bottom-line results were below our expectations this quarter, content distribution and WildBrain delivered strong organic growth and Peanuts continued to perform ahead of plan,” said Donovan in a statement.

In addition, the company announced its intention to cut back on the number of projects it focuses on going forward. Whereas in the past DHX may have produced between 12 and 14 series a year, Donovan said the strategic review has made it clear that DHX must prioritize its most recognizable brands, including Peanuts, Strawberry Shortcake, Mega Man, Polly Pocket and Fireman Sam. “As we’ve gone through this review process, we are increasingly realizing that our opportunities are in our leading brands, and to leverage our considerable production capacity into those brands,” said Donovan.

Scherba added that while DHX will begin focusing a greater degree of its spending on its high-end, tentpole series, the company will also continue building brands with lower-cost content through its multi-platform network Wildbrain. “We think that Wildbrain becomes a really important tool in terms of building brands moving forward,” he said.