Iconix Brand Group (NASDAQ: ICON) will no longer own a handful of iconic brands, including Peanuts and Strawberry Shortcake. Canada’s DHX Media (TSX: DHX) has agreed to acquire the entertainment unit of Iconix for $345 million in cash. The buyer already has Bob the Builder and the Teletubbies in its portfolio to keep Charlie Brown and Snoopy company. Iconix acquired an 80% interest in the Peanuts brand in 2010 and added Strawberry Shortcake to its portfolio in 2015 for a combined cost of $246 million.
Various factors led to the sale. Last year, insurance provider Met Life (NYSE: MET) stopped using Peanuts characters in its ad campaigns after 30 years. In January, Iconix put its entertainment unit on the chopping block to help it pay down some $1.29 billion in total debt.
In short, Iconix badly needed to execute the deal. In addition to carrying a hefty debt load, Iconix has reported 1Q results reflecting licensing revenue was down 11% YoY. The company intends to use the net proceeds from this transaction plus additional cash on its balance sheet to pay down $362 million of debt. Going forward, the company’s once-thriving entertainment segment will be reported as a discontinued operation. Iconix shares closed down more than 4% Tuesday.