Now that Disney's
The family entertainment giant has previously dropped billions on Capital Cities/ABC, InfoSeek, the former Fox Family, Pixar, Marvel, the Muppets, the $700 million Club Penguin scoop, and smaller stakes in Baby Einstein and several video game studios.
Disney's deals usually make synergistic sense, though one can reasonably argue that the company overspent on InfoSeek and Fox Family. At the very least, its whirlwind of deals provide a boost to shareowners, who may gradually forget that chunks of the media giant's growth are not organic.
Marvel may take its time to work through Disney's digestive tract, but there are several other, smaller prospective deals that make too much sense to ignore. Let's go over a few of the companies that would look good as part of the Magic Kingdom:
Electronic Arts
Rumors of an EA buyout have been circulating since late last year, when Disney was building out its gaming division.
I am no fan of EA. I think it's poorly positioned, given its lofty silver-medalist standing in the industry. Much-hyped releases such as last year's Spore have disappointed, and even its once-reliable Madden football franchise is fumbling at the goal line.
However, EA's present shortcomings also provide a ripe opportunity for Disney to swoop in for a favorable deal. Disney's arsenal of characters can reinvigorate EA's The Sims. Disney's ESPN could work promotional wonders for all of the EA Sports lines.
Despite the rallying markets, EA is trading essentially where it was back in December, when the rumors first began to surface. It's time for Disney to pounce.
Build-A-Bear Workshop
The stuffed-animal retailer has seen better days. Comps are off by 16% through the first six months of the year, after several quarters of store-level declines. Shoppers' desire for premium bears customized and "birthed" on the spot began to wane even before the economy threw in the towel.
The upside here is that sales are growing in Europe, and the chain sports a debt-free balance sheet.
There are more than 400 stores throughout the world, and the concept is right up Disney's alley. In fact, Disney has copied the idea at times. In the Whatnot Workshop that debuted at FAO Schwarz last year, guests can create their own Muppets.
Build-A-Bear’s holiday quarter is its biggest, but analysts don't see it earning enough this year to close out 2009 in the black. With nearly a third of its market cap spoken for with its cash balance, this would be a thrifty purchase for a global concept that Disney can quickly spruce up with its growing library of Disney, Pixar, and now Marvel characters.
Disney shied away from retail when it handed the keys of its Disney Store empire to Children's Place
Great Wolf Resorts
There aren't too many companies that can out-Disney Mickey Mouse when it comes to premium family-friendly vacations, but Great Wolf comes close. The hotelier runs a chain of lodges anchored with huge indoor water parks that can operate year-round.
Folks pay hundreds of dollars a night to stay at the resorts, and Great Wolf would give Disney several tourist draws outside of its California and Florida strongholds.
Viacom's
Great Wolf could also use Disney's expansion money. It came through in posting positive EBITDA on an adjusted basis in its latest quarter, and its revenue per available room is holding up far better than the hotel industry as a whole.
Wolves, bears, and spores? There are so many potential mates for a powerful mouse these days.
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What would you buy next if you were Disney? Share your thoughts in the comment box below.
