GLENDALE, Calif. (AP) â¿¿ "Shrek" movie studio DreamWorks Animation SKG Inc. said Monday that it is buying Classic Media, custodian of a library of movies and TV series that includes "Casper the Friendly Ghost," ''Lassie," ''Rocky & Bullwinkle," and "The Lone Ranger." DreamWorks Animation is paying $155 million in cash to Classic Media's owner, Boomerang Media Holdings. Boomerang was formed by private-equity firm GTCR and Eric Ellenbogen and John Engelman, who founded Classic Media in 2000. The move immediately makes DreamWorks' December 2013 movie "Mr. Peabody & Sherman" more profitable because it was based on "Rocky & Bullwinkle" characters that DreamWorks had agreed to license from the Classic Media roster. It also makes DreamWorks a beneficiary of "The Lone Ranger" movie starring Johnny Depp, which The Walt Disney Co. is releasing next July. The acquisition is expected to boost DreamWorks's profits in the first full year after the deal closes. Classic Media has about 80 employees and is based in New York. It had an operating profit of $19.2 million on $82.2 million in revenue in the year that ended Feb. 29. DreamWorks, based in Glendale, Calif., aims for Classic Media to continue the business of licensing its characters, selling movies on home video, publishing and selling consumer products. DreamWorks also plans to mine the character library for future animated movie ideas, said DreamWorks CEO Jeffrey Katzenberg. "We're already making 'Peabody & Sherman.' There are at least a dozen more that have that kind of potential," he said. He did not say whether the acquisition would alter DreamWorks' current strategy of releasing two or three animated movies per year. Classic Media owns 450 movies and 6,100 episodes of TV shows, both animated and live action. They include Christmas classics "Frosty the Snowman," ''Rudolph the Red-Nosed Reindeer" and "Santa Claus is Comin' to Town."
It also owns a comic-book archive and the media rights to the "Golden Books" series of children's books.Tony Wible, an analyst with Janney Capital Markets, raised his fair value estimate on DreamWorks shares to $16 from $15 on Monday, although he kept his "Sell" rating on the stock, saying he remained concerned about the company's theatrical film performance, as well as slowing DVD sales. "The success of the deal will depend in part on how these older characters (many date back to the 1950s) resonate with today's younger audiences," he wrote in a research report. DreamWorks shares slipped 5 cents to $19.11 in late afternoon trading trading as broader markets fell.