Dick Snyder's five-year attempt to turn Golden Books Family Entertainment into a profitable venture is coming to an end. The financially strapped children's publisher reached an agreement last week with DIC Entertainment under which the Burbank, Calif., children's entertainment company will acquire Golden's assets for $73 million in cash, $7 million in notes and the assumption of $90 million of Golden liabilities.
As part of the agreement, Golden has entered into Chapter 11 for the second time. The filing was made in part to permit Golden to redeem senior notes at a less-than-agreed-upon price. The filing also means that Golden's stock will be worthless. The company's stock had been trading on the over-the-counter market, where its last price was $.09 per share. Golden expects the bankruptcy court to approve the sale to DIC within 60 days. In the filing, Golden lists assets of $170.1 million and liabilities of $220.6 million.
DIC was formed in 1983 and acquired from Walt Disney by Andy Heyward with the backing of Bain Capital last November. The company focuses on developing, producing, distributing and merchandising children's animated programming and has a catalogue of more than 2,500 episodes. Among its series are Inspector Gadget, Madeline and Sabrina the Teenage Witch.
DIC plans to turn some of Golden's characters into television shows, something that had frustrated Golden in the past.
Golden's video properties will be integrated into DIC, while the publishing operation will form a second division to publish its own titles as well as books based on licenses owned by DIC. Snyder will become cochairman of DIC. Joe Pretlow, a managing director of Bain, said, "We are looking forward to the successful integration of Golden Books with DIC and are excited to play a part in the restructuring and turnaround necessary to accomplish that goal."
After struggling for about three years to remake Golden, formerly the Western Publishing Co., into first a more traditional publishing company and then a family entertainment company, Snyder was forced to file for Chapter 11 protection in early 1999. The company emerged from bankruptcy last January, but lost $100.2 million in 2000 on revenues of $149.0 million.