Monday, August 31, 2009

Disney pays well for Marvel assets (DIS, MVL)

AlphaNinja - Disney announced they would purchase Marvel Entertainment (MVL) for about $4billion.

While some skeptics are saying that many of Marvel's characters have reached the end of their useful life, Disney will now have access to Marvel's 5,000 lesser-known characters. Plenty of opportunity to exploit these assets.

The price paid is about a 5% Free Cash Flow yield (and that's being generous by using 2008 numbers) and a PE of 21 -->> expensive yes, but not bad at all if Disney's scale and creativity can succesfully utilize Marvel's assets.

One reason for the hefty purchase price is that a huge amount of the shares are owned by Issac Perlmutter, a man who wrestled control of the company away from the likes of Carl Icahn and Ron Perelman. Expect a guy like that to demand a nice payday to part with his shares.
Disney CEO Iger, discussing reasons for the deal, among them being a push into more male-centric characters.

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