Telecommunications giant Verizon announced today that it has entered into an agreement to buy an approximate 24.5% stake in multi-platform media company AwesomenessTV. Verizon will reportedly pay about $159 million.
DreamWorks Animation, which acquired AwesomenessTV in May 2013 for $33 million, will retain a controlling stake in the company, with 51% ownership of outstanding shares, while Hearst will retain the 24.5% it acquired for $81 million in Dec. 2014.
When Hearst bought its stake in AwesomesomessTV less than a year and a half ago, it brought the company’s estimated valuation to $325 million. Upon completion of Verizon’s purchase, AwesomenessTV’s valuation will hit $650 million, according to a release announcing the transaction.
The companies involved in the deal have already been working together on a variety of initiatives.
Last month, Verizon teamed with Hearst to form the 50–50 joint venture Verizon Hearst Media Partners, which is currently developing two channels of video programming, RatedRed.com and Seriously.TV, to be distributed across Verizon’s new Go90 mobile entertainment platform and its 2015 acquisition AOL, as well as through third-party networks and licensors.
AwesomenessTV was one of the initial content partners for Go90 when it launched last fall, and the new deal will significantly expand their relationship. In addition to to Verizon’s investment, the company has also entered into a multi-year agreement with AwesomenessTV to fund a new independent brand that will produce premium, transactional short-form mobile video content that will launch on Go90.
The new service plans to draw upon the Hollywood community — studios, production companies, writers, directors and actors — to create content that has production values on par with broadcast TV. It will initially be exclusive to Verizon platforms in the U.S., with AwesomenessTV retaining the right to sell content in the rest of the world.
“This deal gives us the resources to work with the biggest talent in front of and behind the camera to create this new branded service and produce the most premium short-form content ever, made specifically for the device racking up the fastest growing viewership — the mobile phone,” said AwesomenessTV’s Robbins in a statement. “With Verizon joining DreamWorks Animation and Hearst as part of our equity ownership group, we benefit from the strategic insight and resources of the entertainment and communications industries’ most visionary companies and leaders. Our goal is to be the media company of the future, where content and distribution go hand in hand — we are now one giant step closer to that future.”
LionTree Advisors LLC acted as an advisor to Verizon in the transaction, and J.P. Morgan Securities LLC advised DreamWorks Animation. The parties expect the sale to be completed within the next 60 days.