Toho Acquires North American Animation Distributor GKIDS

Heralding a major shift for independent animation distribution in the United States, powerhouse Japanese distributor and producer Toho announced today that it has acquired a 100% equity share of American distribution company GKIDS.

GKIDS, which has offices in New York City and Los Angeles, will become a wholly-owned subsidiary of Los Angeles-based Toho International. GKIDS founder Eric Beckman will remain as CEO, and Dave Jesteadt will stay on as president of the company. Beckman and Jesteadt have run the company together since the company distributed its first film, The Secret of Kells, in 2009.

Financial terms of the deal were not disclosed.

GKIDS has served as the distributor of Toho projects for many years, including Makoto Shinkai’s Weathering With You, Studio Trigger’s Promare, Spirited Away: Live on Stage, and others. Toho is also the Japanese domestic distributor for many of the same properties handled by GKIDS in North America, including the works of Studio Ghibli, Mamoru Hosoda, and Makoto Shinkai.

GKIDS has played a major role in popularizing international animation in the United States, earning thirteen Oscar nominations for best animated feature, and finally winning the prize this year for Hayao Miyazaki’s The Boy and the Heron.

Toho has been making a major push into the animation space over the past few years. Earlier this year, it acquired the Japanese animation studio Science Saru and two years ago it made an investment in properties owned by Genius Brands’ Frederator. These investments are part of the company’s ambitious ten-year plan for growth and expansion, in which animation plays a central role.

The company calls the plan its “Toho Vision 2032 Toho Group Management Corporate Strategy,” and says its is “to connect its Japanese and international productions, creators, and studios more directly and widely with creators and fans overseas.”

Toho plans to use GKIDS’s North American theatrical and home entertainment distribution, marketing, and sales operations to complement the licensing, merchandising, and e-commerce operations of its existing Toho International banner. GKIDS will retain its brand, organization, and management team, but stands to benefit from the the synergies and capabilities of the much larger Toho parent group.

Toho president and CEO Hiro Matsuoka said in a statement, “Through their hard work, vision, and integrity, GKIDS has built a unique position in the U.S. market, which dovetails perfectly with Toho’s own strengths and strategic mission. This partnership accelerates Toho’s goals to prioritize animation, develop international markets, and support IP creation, while bringing exceptional Japanese and animated content to global audiences.”

Beckman and Jesteadt added in a statement:

For all GKIDS’ filmmakers, content partners, distribution partners, and especially the fans, this is truly great news. GKIDS will continue to operate as we always have – with the same team, the same passion, and the same mission – but now with the backing of a highly complementary and legendary parent company. We are truly thrilled to be joining forces with the esteemed and storied Toho, home to Godzilla and Akira Kurosawa, as well as blockbuster anime franchises like My Hero Academia and Jujutsu Kaisen.> This partnership will empower us to bring even more amazing films to North American and global audiences, while we continue to champion animation as a cinematic artform and push the limits of what the medium is capable of. We could not be more excited about the opportunities in front of us. The best is yet to come.

Nomura Securities Co., Ltd. acted as exclusive financial advisor to Toho, and Nishimura & Asahi (Gaikokuho Kyodo Jigyo) acting as legal advisor. ACF Investment Bank acted as exclusive financial advisor to GKIDS with Sheppard Mullin Richter & Hampton LLP acting as legal advisor.