News Funtastic to Sell Australia's Madman Entertainment to Founders
posted on 2014-03-08 22:37 EST
Funtastic Limited announced on Tuesday that it has received two offers for distributor Madman Entertainment. Madman Entertainment original founders, Tim Anderson and Paul Wiegard, announced that they would be purchasing the company back from Funtastic Limited. Anderson and Wiegard state how Funtastic and Madman's aims had diverged and that Tim Anderson and Paul Wiegard wanted to be back in control and continue to develop Madman.
Funtastic Limited has agreed to the sale and the key terms of the sale and are heading into an exclusive negotiation period. Anderson and Wiegard expect a final sale agreement for Madman Entertainment to be signed in a few weeks.
Funtastic realized after evaluating the offers that Madman Entertainment's market value is only half of its carrying value, or AU$24 million to AU$30 million dollars (about US$21.8-27.3 million). Madman Entertainment earned an estimated AU$6-7 million (US$5.5-6.3 million) in the 2013 fiscal year, down from US$8.6 million (US$7.8 million) last year.
Funtastic appointed Canterbury Partners to sell Madman Entertainment. Funtastic's share price did drop 20 percent in value following the announcement and closed at 12c on Tuesday.
Madman Entertainment was originally acquired by Funtastic Limited in 2006 for AU$34.5 million (US$31.4 million).