Disney said Monday that it would acquire the Marvel super-hero factory in a cash and stock transaction that values each share of the comic-book colossus at $50, a 29 percent premium based on the stock's Friday close.
"We'll take a look and see, but the bottom line is we like what they've been doing so far," Disney studio head Richard Cook told The Hollywood Reporter.
Disney said it would pay $30 in cash plus about three-quarters of a Disney share for each share of Marvel. The payment consideration will fluctuate depending on the price of Disney shares so that not less than 40 percent of the price-tag will consist of Disney stock.
"Disney stock is attractively priced and that's why it's important to Marvel," said Cook.
Disney acquires ownership of 5,000 Marvel characters to be overseen by Marvel CEO Ike Perlmutter, who is charged with cherry-picking when and where they'll show up within Disney's vast empire, including online and in video games.
The move marks the second largest acquisition since Robert Iger replaced Michael Eisner as CEO of Disney and quickly purchased Pixar for $7 billion.
"We believe that adding Marvel to Disney's unique portfolio of brands provides significant opportunities for long-term growth and value creation," said Robert Iger, president and CEO of Disney, who is pictured above.
"Disney is the perfect home for Marvel's fantastic library of characters given its proven ability to expand content creation and licensing businesses," said Ike Perlmutter, Marvel's Chief Executive Officer. "This is an unparalleled opportunity for Marvel to build upon its vibrant brand and character properties by accessing Disney's tremendous global organization and infrastructure around the world."
In a conference call Monday morning, Iger said the deal should close by year's end.
He called the Marvel integration an opportunity similar to the $7 billion acquisition of Pixar a few years ago, saying the combined assets will be more valuable than its separate parts. And Iger pointed to the global and cross-platform appeal of Marvel's characters as key opportunities in his second-biggest acquisition at the Mouse House that are even more important in "a world of increasing consumer choice."
Iger said though that longer-term Disney wants to be the exclusive distributor of Marvel films. While the company respects and will honor Marvel's third-party licensing deals with Paramount, Fox and Sony, "it clearly would be in our best interest if we ended up as the sole distributor," he said. "When you distribute your own films, the opportunity is even better."
The Paramount deal, for example, contemplates another five more pictures and will then be reviewed, said Disney CFO Tom Staggs.
Asked about potential Pixar-Marvel synergies, Iger said Disney executives have had some conversations internally, and Pixar creative guru John Lasseter has met with Marvel folks as well. "The group got pretty excited pretty fast," Iger said, adding he expects exciting collaboration opportunities. "Sparks will fly," he said.
Staggs said the Marvel deal will dilute Disney's earnings in the mid single digit range in fiscal year 2010. He projected it should add to earnings by fiscal 2012.
Miller Tabak analyst David Joyce called the deal a "good move" for Disney, even though it "should put some near-term risk arbitration pressure on it."
He pointed out that the Pixar acquisition a few years ago worked out well for Disney under Iger's leadership.
"Disney already knows how to monetize characters across multiple platforms, and now it has 5,000 [Marvel] characters to apply its success to," Joyce said. "It helps give Disney a new, rational area to expand its exposure to younger audiences, especially boys, in which Disney had lost some balance in recent years." Iger said more Marvel content will, for example, be seen on the boys-centric Disney XD channel.
Nielsen Business Media