Introduction
Last Thursday April 28, 2016, Comcast Corporation announced after quick merger talks that it would acquire DreamWorks Animation SKG for $3.8bn in an all-cash transaction. DreamWorks Animation will be folded under Comcast’s NBCUniversal in its Universal Filmed Entertainment Group, which counts Universal Pictures, Fandango, and NBCUniversal Brand Development. According to the board, DreamWorks Animation will be a strong addition to Universal’s film portfolio and it will fuel theme park and consumer products sales growth, especially in Asia.
About DreamWorks Animation
DreamWorks Animation SKG Inc is a studio headquartered in Glendale, California. It was formed by the merger of the feature animation division of DreamWorks and Pacific Data Images, but since it was spun-off in 2004 it has operated as an independent company. The company produces features films, television programs, web and new media content and consumer products.
DreamWorks was founded in 1994 by three extremely well known figures in the media industry: Jeffrey Katzenberg, Steven Spielberg and David Geffen. The first was the former CEO of Walt Disney, the second one of the most famous film directors and producers and the third an important music executive. The three contributed $33m each, and managed to obtain an additional $500m from Microsoft co-founder Paul Allen. The founders’ aim was to create a Studio that could compete with Disney in the field of animation. In 1998, DreamWorks released its first two animated films (“Antz” and “The Prince of Egypt”). In 2001, DreamWorks reached its best success with respect to animated films, with the release of the movie “Shrek”.
After the success of Shrek 2, the animation division of the company, under Katzenberg’s control, was spun-off. The unit, valued at about $2.64bn, raised around $725m in the IPO. 29 million shares, making up some 27.5% of the company, were sold at a price of $28 per share. Jeffrey Katzenberg became the CEO of the newly formed company, which started producing solely animated feature movies and television programs.
As of today, the Studio has released 32 animated feature films and has a plan to launch two animated movies per year. In 2015, the company produced $916m of revenue and $16m of operating margin. The founder Jeffrey Katzenberg is still the CEO. However, coupled with its family-friendly box office successes over the years, it recently wrote down investments on not-so-successful movies like The Penguins of Madagascar– a spin-off of the well-known Madagascar series – and last year it went through a restructuring of its workforce and management.
DreamWorks Animation SKG, Market cap as of 29/04/2016: $3.8bn
Comcast Corporation, Market cap as of 29/04/2016: $147.12bn
[Continua a leggere su bsic.it]
All the views expressed are opinions of Bocconi Students Investment Club members and can in no way be associated with Bocconi University. All the financial recommendations offered are for educational purposes only. Bocconi Students Investment Club declines any responsibility for eventual losses you may incur implementing all or part of the ideas contained in this website. The Bocconi Students Investment Club is not authorised to give investment advice. Information, opinions and estimates contained in this report reflect a judgment at its original date of publication by Bocconi Students Investment Club and are subject to change without notice. The price, value of and income from any of the securities or financial instruments mentioned in this report can fall as well as rise. Bocconi Students Investment Club does not receive compensation and has no business relationship with any mentioned company.
Copyright © May-16 BSIC | Bocconi Students Investment Club