Genius Brands International Inc (NASDAQ:GNUS) announced on Monday that the company has acquired North American marketing and media company ChixCom Ltd.
What Happened? Genus is merging with ChizComm, which is the largest buyer of children’s media and has more than $100 million in annual aggregated media spend. As part of the deal, Genius Brands will also acquire ChizComm Beacon Media, ChizComm’s media research, planning and buying division.
Why It’s Important: ChizComm represents more than 30 of the leading toy companies and top brands in children and family media. The company also has media relationships with Walt Disney Co (NYSE:DIS), YouTube and other top digital and traditional media companies.
“Our strategy has been to accelerate the growth of Genius Brands through smart and accretive acquisitions. ChizComm achieves this goal and more, by driving revenue and generating immediate synergies and strategic opportunities to enhance the core businesses of Genius,” Genius Brands’ Chairman & CEO Andy Heyward said.
Genius is likely hoping the ChizComm deal can help the company monetize its “Kartoon Channel!” which is available for free on most popular streaming platforms.
Genius shares skyrocketed from around 50 cents to a peak of above $10 earlier this year in anticipation of the launch of “Kartoon Channel!” and Heyward told Benzinga back in July that he anticipates Genius will be profitable by the end of 2020.
Shares are now back down under $1.30 after the company’s recent announcement of a 37.4 million-share stock offering.
Benzinga’s Take: Genius has announced several key deals so far in 2020, but investors need those deals to start paying off in the company’s financial numbers in the second half of the year. In the second quarter, Genius reported an impressive 21% revenue growth, but losses from operations also expanded from $1.67 million to $2.38 million.