Genius Brands, the company behind the Baby Genius videos and music, announced a merger Friday with A Squared Entertainment, an animation studio that has struck partnerships with billionaire investor Warren Buffett and Stan Lee's POW! Entertainment. Financial details of the transaction were not disclosed, except that it is a 50-50 merger that involved paying off $1.5 million in debt so that the combined company's balance sheet is debt-free.
Genius Brands specializes in programming aimed at kids up to age 5 and A Squared creates shows for kids 6-11.
The merged company will operate under the Genius Brands moniker and be run by new CEO Andy Heyward and his wife Amy Moynihan Heyward, who will assume the role of president of Genius. Plans are for the "A Squared" brand to be shelved, though it could reappear later on certain products.
Klaus Moeller, CEO of pre-merged Genius, will become vp of special markets for the combined company.
Andy Heyward has a long history in children's programming, having co-founded in the 1970s DIC Entertainment, the animation studio behind Inspector Gadget and The Real Ghostbusters, among others.
The Heywards founded A Squared in 2009 and one of their first shows was Secret Millionaires Club, which features an animated Buffett as a secret mentor to a group of enterprising children. The Heywards' relationship with Buffett began about 15 years ago when they were asked to produce an animated video to open the shareholder's meeting of Berkshire Hathaway, Buffet's company.
More recently, A Squared began work on Stan Lee's Mighty 7 through a relationship with the legendary creator of superheroes POW! Entertainment company. Mighty 7 is a comic book series and a show is planned for The Hub children's network. The company also created Martha & Friends with Martha Stewart and Gisele & the Green Team with Gisele Bundchen. In development now is Thomas Edison's Secret Lab.
Beyond its flagship Baby Genius products, Genius Brands produces Christian music CDs for kids under the Wee Worship brand, and it also has Little Genius, Kid Genius and 123 Favorite Music.
Prior to the merger, Genius Brands had fallen on hard times. Its revenue in the first three months of the year fell to $1.6 million, down from $4.3 million a year earlier, and its shares are off more than 70 percent in the past 12 months.
"We're bringing in a new vision and new management," Andy Heyward said. "We think Genius is a wonderful brand but under-exploited."
Genius Brands was advised on the transaction by Greg Suess and Bernard Cahill of ROAR, and ROAR will represent the combined company. A Squared was advised by Joe Pretlow. Cahill also remains as a board member.
Other directors of the new company are the Heywards and Moeller, along with former California Gov. Gray Davis, COO of American Greetings Jeff Weiss, Atlas Merchant Capital Partner Will McDonough, and The Hollywood Reporter publisher and senior vp Lynne Segall.