3i has acquired Chorion, a UK-based brand owner and manager, in a public to private transaction.
Chorion was formed in 2002 and the business focuses on brand development and management, generating revenue by charging royalties on toy merchandising, book publishing and TV. It operates on a global basis, with a portfolio which includes well recognised classic children's brands such as Noddy, Famous Five and other Blyton characters, the Mr Men, Olivia the Pig, and the works of crime writers such as Agatha Christie (Miss Marple and Poirot) and Georges Simenon (Maigret).
Brand development
Chorion's business model is based around the acquisition and development of under-exploited brands. These brands are typically acquired following the relationships that Chorion establishes with second or third generation descendants of the original authors.
Prior to acquisition by 3i, Chorion was listed on AIM. However, the shorter term outlook of the public markets, together with the need to raise further capital to invest in the development of its existing portfolio of brands meant that the business was best suited to private ownership. The management team - headed by Chairman Waheed Alli - therefore decided to de-list the business.
3i was a natural choice for the management team given its strong credentials in the media sector. Chris Williams, Partner, 3i, explains: "The media sector is an industry that we know exceptionally well through investments such as Sparrowhawk Media and Pinewood Shepperton. Our existing relationship with Waheed Alli and our confidence in the wider management team and the quality of the properties put us in a strong position to win the deal."
"3i was the natural partner for management, given their knowledge and expertise of the media sector and our previous working relationship through my board role at Shine. I am looking forward to working with them in further developing Chorion into the pre-eminent brand management business in the sector," said Waheed Alli, Chairman, Chorion.
From public to private
3i's decision to invest was founded on Chorion's proven business model, and a track record of successfully acquiring and generating value from classic brands. Since its demerger in 2002, the business has enjoyed impressive revenue and EBITDA growth, with the latter increasing at a CAGR of 28% between 2002 and 2005. 3i has committed further funding to Chorion in order to develop its existing stable of brands and will also provide strategic support to the board and give the business access to its network.
New characters
In November 2007, 3i helped the business to acquire The Copyrights Group, who manage the licensing and merchandising rights to brands such as Beatrix Potter, Paddington Bear and The Snowman.
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