Blackstone-backed firm nears $3 billion deal for Moonbug Entertainment

According to three individuals familiar with the situation, a group funded by Blackstone Group (BX.N) and overseen by former Walt Disney Co (DIS.N) executives Kevin Mayer and Tom Staggs is approaching an agreement to buy Moonbug Entertainment for $3 billion.

The agreement for the media company behind the children’s entertainment show “CoComelon” might be announced as early as this week, according to sources who asked to remain anonymous because the talks are private.

The proposed agreement calls for the Blackstone-led firm to pay Moonbug $2.75 billion upfront. According to the sources, the remaining $300 million will be paid dependent on the company’s performance.

They did warn, however, that the terms of the arrangement and the date of the announcement could alter.

Moonbug did not respond to a request for comment from Reuters right away. Blackstone did not respond to a request for comment. The talks between Blackstone and Moonbug were first revealed by The Information.

In August, the Blackstone-backed consortium agreed to buy Hello Sunshine, the media company founded by Academy Award-winning actress Reese Witherspoon, for an undisclosed sum.

Moonbug, which was founded in 2018, has produced children’s entertainment such as “Little Baby Bum” and “Blippi,” and its hit show “CoComelon” has over 100 million YouTube subscribers. Mayer managed acquisitions at Disney, including 21st Century Fox, Pixar, Marvel, and Lucasfilm, and drove the creation of Walt Disney Co.’s (DIS.N) streaming service Disney+ as chief strategy officer.

He was also the founder and former CEO of TikTok. Should the acquisition go through, it will be in line with Staggs and Mayer’s vision for their new media firm. Moonbug’s children’s shows are well-liked on YouTube and Netflix (NFLX.O), and the company’s well-known characters could aid licensing and merchandising.