Moonbug Entertainment Ltd., the company behind the popular YouTube children’s channels Cocomelon and Blippi, agreed to be acquired by two former Walt Disney Co. executives in a deal valued at around $3 billion.
Kevin Mayer and Tom Staggs, who were each in line to lead Disney at one time, said in an interview Thursday they are financing the deal with money from Blackstone Inc. and debt. They previously teamed with the private equity firm to buy Hello Sunshine, the production company founded by actress Reese Witherspoon.
Mayer and Staggs are building an independent entertainment studio that can supply TV shows and movies to all the major streaming services, distribute videos across social media and sell merchandise including toys and video games. They declined to discuss the financial details of the transaction, but two people familiar with the terms put the value at around $3 billion.
In Moonbug, the pair is acquiring the most-popular kids’ entertainment property of the streaming age. Cocomelon has more than 120 million subscribers on YouTube, where it generates more than 3 billion views a month. The company also produces “Cocomelon” episodes that rank among the most popular shows on Netflix Inc. The shows feature sing-alongs with cartoon characters, including lyrics so kids can read along.Private equity firms have poured billions of dollars into film and TV production companies and music rights in recent years, leading some Hollywood executives to question the prices being paid. Hello Sunshine doesn’t own much of a catalog, and Moonbug is just three years old.
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