The Chernin Group, Peter Chernin’s investment firm, announced that it is buying 25% of Funko, the pop-culture collectibles company, alongside a group of investors that includes former Disney chief Bob Iger.
The consortium led by TCG will make a $263 million strategic investment in Funko, acquiring 80% of ACON Investments’ shares in Funko Class A common stock for $21/share. Along with Iger, investors in the consortium include ecommerce giant eBay and Rich Paul, CEO and founder of Klutch Sports Group and UTA’s head of sports.
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Shares of Funko popped more than 40% in after-hours trading (before settling down a bit to +27%) on the investment news as well as Funko’s first-quarter 2022 earnings report, which topped Wall Street expectations. The stock had closed down 5.8% in regular trading amid a broader market swoon.
“We believe Funko is significantly undervalued in the public markets and at this highly attractive entry price provides a runway of opportunity and growth potential,” Peter Chernin said in a statement. “There are many areas of identifiable growth across content, commerce, marketplaces, consumer products and technology that should drive substantial increases to Funko’s performance.”
Iger tweeted, “I’m a big fan of @OriginalFunko and I’m excited to join the team!”
Funko’s products include vinyl figures, action toys, plushies, apparel, board games, housewares, NFTs and accessories. The company claims it’s the world’s largest proprietor of product licenses. Funko has licensing deals with companies including Disney, Warner Bros., Marvel, Lucasfilm, NBCUniversal, Netflix, Epic Games, Blizzard Entertainment, the NFL and the NBA.
With the investment, Funko and eBay are entering into a commercial agreement under which eBay will become the preferred secondary marketplace for Funko. The companies also will partner on “exclusive product releases.”
With the investment in Funko, Chernin Group will designate two directors to the board including Jesse Jacobs, TCG co-founder and partner, with the other to be announced. Iger and Peter Chernin will serve as strategic advisers to the Funko board. Paul will provide input to the company to “advance Funko’s continued product expansion and growth opportunities in sports and music.”
“This investment from TCG validates Funko as a leading lifestyle brand with a pulse on what’s trending in pop culture,” Funko CEO Andrew Perlmutter said in a statement.
Separately Thursday, Funko reported Q1 revenue of $308 million, up 63% year-over-year. Adjusted net income rose 42% to $18.4 million (or 34 cents per share) excluding equity-based compensation, severance costs and other expenses. Analysts on average had forecast revenue of $272 million and adjusted EPS of 22 cents, per Refinitiv.
Pictured above: Funko Pop! figures of The Child (aka Baby Yoda) from “The Mandalorian”
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