WildBrain has signed a definitive agreement to sell two-thirds of its television broadcast business to Halifax-based independent children’s studio Island of Misfits (IoM) Media Ventures.

The sale, announced today (Dec. 18), includes Family Channel, Family Jr., WildBrainTV and Télémagino. It is expected to close in three to six months, pending approval from the Canadian Radio-television and Telecommunications Commission.

The proceeds will be primarily used by WildBrain to pay down its debt, according to a release.

WildBrain said it expects to receive more than $40 million over the next four years from the transaction and continued involvement in the channels via up-front and deferred purchase consideration, minority participation distributions, content licensing and other fees.

With its remaining one-third ownership share, WildBrain said it will no longer be subject to non-Canadian ownership restrictions under the Broadcasting Act relating to non-Canadian ownership. In a release, WildBrain stated this will allow it to remove the variable voting share structure for non-Canadian shareholders over time.

The company said it will continue to operate the channels during the transition period, and there are currently no plans for management, workforce or location changes for the channels.

IoM partnered with New York-based private investment firm MEP Capital, which focuses on sports and entertainment as well as an existing IoM investor to complete the transaction.

“As we continue to strategically focus on driving high-growth areas for key global franchises and partnerships, this transaction is a critical step forward in simplifying our business,” said Josh Scherba (pictured), WildBrain’s president and CEO, in a statement. “Financially, we believe it strikes a balance between economic participation for WildBrain while benefiting our leverage profile over the long term.”

Dana Landry, IoM’s president and CEO, said the company is looking forward to accelerating its growth and expanding its footprint in the kids’ and family entertainment space.

WildBrain maintains its fiscal 2025 outlook until after the transaction closes, said the release. The company anticipates revenue growth of approximately 10% to 15% and adjusted EBITDA growth of approximately five to 10%, according to its year-end financial report in September. WildBrain reported $461.8 million in revenue in fiscal 2024 compared to $532.9 million in 2023, along with a net loss of $106 million compared to $45.6 million the year prior.

The company is holding its annual and general meeting virtually on Thursday (Dec. 19).

Image courtesy of WildBrain