Scholastic, the global children’s publishing, education and media company, today announced it has signed a definitive agreement to invest in 9 Story Media Group. Through the investment, Scholastic will acquire 100% of the economic interest in and a minority of voting rights in 9 Story Media Group, a leading independent creator, producer and distributor of premium children’s content, for approximately USD $186 million, subject to customary closing adjustments.
The strategic investment in 9 Story’s team and best-in-class production, sales and licensing capabilities significantly expands Scholastic’s opportunities to leverage its trusted brand, best-selling publishing and beloved global children’s franchises across print, screens and merchandising. Today’s announcement solidifies a long-time collaboration between Scholastic Entertainment, the company’s successful and award-winning media development and production division, and 9 Story, which includes the animated series reboot of Clifford the Big Red Dog on PBS Kids and Prime Video and production of Eva the Owlet on Apple TV+.
“This highly strategic combination, adding 9 Story’s industry-leading capabilities with Scholastic’s trusted brand and proven ability to create iconic children’s series and franchises, has tremendous potential to build deeper connections with young people through our stories, as the pages of our books come to life on screens and through merchandising. At its core, Scholastic’s 360° content creation strategy is about engaging children with reading, and we have introduced our stories to generations of kids by reaching them where they are,” said Peter Warwick, Scholastic President & CEO. “We are thrilled to build upon our more than 20-year relationship with 9 Story’s exceptional management team and employees, whose culture and values could not be better aligned with our own.”
Iole Lucchese, Scholastic Board Chair & President, Scholastic Entertainment, added, “By bringing together Scholastic’s knowledge of what kids love and our proven track record of successful media development with 9 Story’s top-rated global production, distribution and licensing capabilities, I am confident we can meet the continued, strong demand for high-quality kids and family entertainment. Today’s announcement presents a huge opportunity to expand the footprint of Scholastic’s authors and illustrators and to build global franchises on every platform, creating more value for the creators and for our shareholders.”
9 Story’s business divisions include Brown Bag Films, the award-winning animation studio, which has won 21 Emmy Awards and two Oscar nominations; 9 Story Distribution International, the global distribution division, which represents more than 5,000 half-hour episodes of 2D and 3D animated and live-action programming for kids, including Clifford the Big Red Dog and A Kind of Spark; and 9 Story Brands, the consumer products division, which builds global kids’ brands both on- and off-screen, including Daniel Tiger’s Neighborhood, Karma’s World and Super Why.
9 Story recently announced a significant deal with Crayola Studios to handle production and distribution on all new, original projects, as well as the acquisition of Portfolio Entertainment’s library, production slate, and development projects, which added more than 550 half-hours of content.
Vince Commisso, President & CEO, 9 Story, said, “We’ve been fortunate to work with Scholastic for decades, going back to my own start with the family-favorite production, The Magic School Bus. The combination of our global studios, sales and distribution capabilities with Scholastic’s existing media business, iconic name and unique capabilities opens even more opportunities to deliver compelling stories and build impactful brands for audiences worldwide. We’re eager to begin bringing together our complementary talents to enhance Scholastic’s position as a top developer, producer and distributor of kids and family content.”
Scholastic Entertainment was rebooted under Lucchese’s leadership in 2017, aiming to capitalize on the untapped potential of Scholastic’s children’s content. Since then, the development and production division has rapidly become an award-winning and highly profitable business, most recently announcing production of a second season of the live-action Goosebumps series for Disney+ and Hulu.
About the investment:
Under the terms of its definitive agreement with 9 Story, Scholastic will acquire 100% of the economic interests and a minority of voting rights in 9 Story for approximately USD $186 million, subject to customary purchase price adjustments.
The investment has been approved by both companies’ boards of directors and the shareholders of 9 Story. Subject to receipt of a satisfactory opinion by the Minister of Canadian Heritage and other customary closing conditions, the transaction is expected to close in Scholastic’s fiscal 2025 first quarter, which begins on June 1, 2024. Scholastic intends to initially fund the transaction from its available cash and its revolving credit facility and anticipates maintaining its regular dividend and its authorized stock repurchase program.
9 Story recorded revenue of approximately USD $104 million in its most recent fiscal year, ended August 31, 2023. Scholastic expects the addition of 9 Story to contribute long-term earnings accretion, reduce the capital intensity of production and drive substantial improvements in top-line growth and bottom-line results through 9 Story’s existing content library, best-in-class production studios, and global distribution and licensing capabilities.
A supplemental presentation with further details on the transaction and its strategic rationale is available here.
