DHX Media gets round of upgrades, more to come?

DHX Media today announced it would acquire Family, the most-viewed children’s channel in Canada, as well as Disney XD, and the French and English versions of Disney Junior from Bell Media for approximately $170-million in cash.After a Q1 in which it doubled its topline year-over-year, DHX Media (TSX:DHX) has been met by a round of Bay Street upgrades, but news today suggests we might not have seen the last of these re-ratings.

Cormark today upgraded the stock from “Market Perform” to “Buy” following Scotia’s target price raise on Tuesday. Scotia isn’t exactly bullish on the stock though, rating the stock as a “Sector Perform” and upping their one-year target price to $4.60. RBC, however, has an “outperform” rating on the stock and a new $5.00 target as of Tuesday, up seventy five cents from its old target.

On November 14th, DHX released Q1 results that showed earnings of $2.15-million on revenue of $27-million.

Today, DHX released news that may send some analysts back to the drawing board, as the company rose more than 25% to close at $5.19.

DHX announced it would acquire Family, the most-viewed children’s channel in Canada, as well as Disney XD, and the French and English versions of Disney Junior from Bell Media for approximately $170-million in cash.

CEO Michael Donovan says the pickup is a good strategic fit for the Halifax-based company.

“The acquisition of these high-quality Canadian channels represents an exciting new addition to DHX, one that complements and enhances all areas of our business and positions us for our next stage of growth,” he said.

To pay for the monster acquisition, DHX says it has arranged a full underwritten senior debt financing with RBC Capital Markets. It will consist of a $210-million five year term loan and a $30-million revolving credit facility.

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