Canadian animation veteranMichael Hirsh is buying Cinar, the troubled Montreal-based animation house. TheUS$144m sale puts Hirsh, co-founder and former CEO of Toronto-based Nelvana Limited,back in the centre of the Canadian animation scene he helped establish.
Backed by a Canadian equitycapital fund, TD Capital Canadian Private Equity Partners, Hirsh and partnerToper Taylor plan to transform the company into a market leader in edutainment.
Taylor, formerly presidentof international distribution, marketing and consumer products for NelvanaLimited and president of Nelvana Communications, its Los Angeles-based sales anddevelopment office until his exit in January of this year, told ScreenDaily.com,"Michael and I believe in the combination of entertainment and education."
He said they will be lookingto build on the success of Cinar's educational divisions, Carson-Dellosa andHighReach Learning, while rebuilding the business and reputation of theentertainment group. "We want to bring Cinar back to the prominence and thesuccess it enjoyed in the 1990s but without the complications."
The all-cash offer willallow the partners to take the company private, a strategy Taylor said willallow the new owners "to invest in the future without worrying about hittingtomorrow's projected earnings." He said the long-term plan is to take thecompany public "when we've got a great story."
The buyers and their army oflawyers manoeuvered through a legal mine-field, the legacy of Cinar's disgracedco-founders and ousted chief executives Micheline Charest and Ronald Weinberg.Case in point: according to a release "approximately $1.2m of the purchaseprice will be held in escrow pending resolution of a dispute with Charest andWeinberg regarding the validity of their exercise of 840,000 options."
The high-flying couple fellto earth in 1999 following revelations of abuse of federal subsidy regulationsand their use of Cinar funds as a private bank. Since then the company has beenin corporate limbo while various stakeholders battled for control. In 2001, thecompany paid more than C$1.7m in restitution to Telefilm Canada in order thatits productions could again qualify as official coproductions.
Hirsh left Nelvana in October 2002, having sold the company to Canadianentertainment company Corus.