Canadian company Entertainment One on the move again, to be sold to Lionsgate

Hasbro is selling its eOne television and movie business to Lionsgate in an approximately $500-million US deal, after having paid $4 billion for the company four years ago.

Hasbro said Thursday that the agreement with Lionsgate includes $375 million in cash and the assumption of production financing loans.

The acquisition will give Lionsgate access to eOne's library of almost 6,500 titles, including Grey's Anatomy, Yellowjackets and The Woman King.

Lionsgate will also receive film development rights to Hasbro's Monopoly, based on the popular board game.

"Lionsgate's management team is experienced in entertainment and adept at driving value, and we're glad to have found such a good home for our eOne film & TV business," Hasbro CEO Chris Cocks said in a statement. "We look forward to partnering with them, especially on a movie adaptation of Monopoly."

The deal allows Lionsgate, the Santa Monica, Calif.-based company, to continue to scale its operations in the U.K. and Canada, where it has recently launched production partnerships with BBC Studios, Channel Four, CBC, Rogers' CityTV and Bell Media.

Hasbro purchased Entertainment One Ltd. in 2019 in an all-cash deal valued at about $4 billion. At the time, Hasbro was interested in eOne's preschool brands, which included Peppa Pig and PJ Masks. Hasbro will keep ownership of the family brands division, so it will still have access to Peppa Pig and PJ Masks.

Entertainment One, based in Toronto, grew through a series of acquisitions over the past 15 years, including of Alliance Films in 2013. Its roots go back to the long-defunct music distributor Records on Wheels, becoming Entertainment One in 2005

Sale expected to close this year

While Hasbro had high hopes for the deal, in November it announced that it was looking to sell the part of eOne's television and film business not directly supporting its branded entertainment strategy.

The boards of Hasbro and Lionsgate have approved the transaction, which is targeted to close by the end of the year.

Hasbro said it will use proceeds from the deal to retire a minimum of $400 million of floating rate debt by year's end.

The toy company also reported its financial results for the second quarter on Thursday. Hasbro lost $235 million, or $1.69 per share, in the period, reversing a year-earlier profit.

Revenue for Hasbro, based in Pawtucket, R.I., fell to 10 per cent to $1.21 billion, beating Wall Street's estimate of $1.11 billion.

Shares of Hasbro rose slightly in midday trading.