Scholastic to invest in 9 Story Media Group

Scholastic 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, an independent creator, producer and distributor of children’s content, for approximately $186M, subject to customary closing adjustments. 9 Story’s business divisions include Brown Bag Films animation studio, which has won 21 Emmy awards and two Oscar nominations; 9 Story Distribution International, the global distribution division; and 9 Story Brands, the consumer products division. The investment has been approved by both companies’ boards of directors and the shareholders of 9 Story. The transaction is expected to close in Scholastic’s 1Q25, 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. Story recorded revenue of approximately $104M in its most recent fiscal year. 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.