I'm going to make a lot of money today. While I should be happy, I just don't feel like celebrating.
Oh, what a steal this deal is.
Those who've followed my Marvel coverage for a while know that I love its industry-leading returns on capital, massive free cash flows, and rich partnership deals with the likes of Sony
Foolish colleague Rick Munarriz and I recently dueled over which of these two stocks is more enticing. My take was, and still is, that Marvel's massive licensing machine -- the fourth largest in the world, according to License Global magazine -- has room to grow at half of Disney's royalty rate. That's why this deal makes so much sense. With Marvel, Disney is buying no-brainer licensing growth.
And it's doing so on the cheap. Disney gets Marvel for just north of 20 times earnings. That sounds expensive, I know. Here's why it isn't: Long before Iron Man was a box-office blockbuster, Marvel was boosting operating income by 28% a year.
Yes, you read that right: 28% a year, without a contribution from Marvel Studios.
I'm going to make a lot of money today, and I'm happy about that. But as it so often happens with the very best businesses, this one is being taken out too soon, at too cheap a price.
What do you think about Disney's acquisition of Marvel? Who got the better deal? Let me know by leaving a comment below.