Corus Entertainment’s Nelvana has entered an agreement to sell its Montreal-based subsidiary Toon Boom Animation to New York-based private equity firm Integrated Media Company (IMC) for $147.5 million in cash.

The acquisition of the animation software company was announced Thursday (July 13), with net proceeds — estimated at approximately $142 million — to be used by Corus “to repay outstanding bank indebtedness,” according to a news release.

“After an enterprise-wide review of our operating model and asset base, we have decided to exit the animation software business,” said Colin Bohm (pictured), EVP of content and corporate strategy at Corus, in a statement. “This move will free up capital, increase Corus’ financial flexibility, and sharpen our focus as we advance our strategic plan and priorities.”

The transaction is expected to close later this year, and is subject to “customary adjustments and closing conditions in the jurisdictions where the parties do business,” said the release.

U.S. investment banking firm LionTree Advisors was the exclusive financial advisor on the deal with Corus, while law firm McCarthy Tétrault LLP represented Corus in the deal. Law firms Weil, Gotshal & Manges LLP and Davies Ward Phillips & Vineberg LLP were the legal counsel for IMC.

Corus acquired a 50% stake in Toon Boom in 2004 before purchasing the remaining shares in 2012, with Corus subsidiary Nelvana taking ownership the company. Toon Boom won a Primetime Engineering Emmy in 2012 for its Storyboard Pro software.

The transaction marks Corus’ latest effort to reduce its operating costs amid declining advertising revenue. The company has reduced its workforce by 8%, accounting for more than 250 employees, since launching its cost review earlier this year, according to president and CEO Doug Murphy in a recent call with investors. Confirmed cuts have hit both Global News and the company’s original programming team.

Corus reported a year-over-year revenue decline of 8% in its recent Q3, with revenue down 7% for the year-to-date.