Vancouver, Canada-based Rainmaker Entertainment has gone on a buying spree, acquiring New York-based animation studio and multi-channel network Frederator Networks and Canadian kids production company Ezrin Hirsh Entertainment. The trio will combine to form WOW! Unlimited Media with Rainmaker and Frederator continuing to operate under their current names.
Frederator founder Fred Seibert will take US$12.7 million (CDN$17 million) in equity from his company in exchange for shares in WOW! to become the largest shareholder in the new venture. Frederator currently operates an animation studio and arguably the world’s largest animation-only MCN on YouTube, which averages 450 million views per month, has 30 million subscribers, and comprises 2,800 channels. It also holds established relationships in the digital distribution space with Netflix, Amazon and the Chernin Group.
Ezrin Hirsh Entertainment, meanwhile, is a kids content producer consisting of Nelvana co-founder Michael Hirsh (pictured), music producer Bob Ezrin, business development consultant Neil Chakravarti, and former SVP of advertising at Warner Bros. Pictures Christian Davin. It will take US$3.9 million (CDN$5.2 million) worth of shares in WOW!
WOW! will be led by Hirsh, who assumes the roles of CEO and chairman of the board, while Seibert (whose production credits include Adventure Time and The Fairly OddParents) takes the position of chief creative officer. Ezrin takes the role of vice chairman, while Chakravarti becomes president and COO. In addition, Bryant Pike has been named CFO and Michael Hefferon, Rainmaker’s president and CCO, will serve as EVP.
WOW! will fuse Rainmaker’s animation-production infrastructure with Frederator’s distribution platforms to create children’s content with a focus on multiple platforms, including video-on-demand, mobile and linear TV.
Once the transaction is complete, WOW! will reorganize its capital structure to meet Canadian Broadcasting Act requirements. Additionally, all of Rainmaker’s US$10.41 million (CDN$13.5 million) convertible debt will be eliminated. Following completion, the company will possess an estimated net cash position of roughly US$8.2 million (CDN$11 million), which will be used for future acquisitions and other initiatives. At this stage, there will be no movement of personnel and each of organization will continue to operate in their current offices and studios.
In May, Rainmaker took a US$7.5-million (CDN$10-million) write-down following the disappointing North American debut of Ratchet & Clank, which earned US$4.8 million on its opening weekend.
A month earlier, Gregory R. Little returned to the company to oversee creative development, content strategy and sales, as Rainmaker looked to further strengthen its original production pipeline and service business across its film and Mainframe television divisions. Based in L.A., Little has been developing strategies to exploit emerging platforms and distribution models.
And a little over a year ago, it was announced that Rainmaker had proposed a deal to acquire producer Shaftesbury Entertainment for US$15.3 million (CDN$20.5 million). However, the share purchase agreement was terminated when the deal ran over the three-month window for completion.
From Playback. With files from Wendy Goldman Getzler.