Lego owner Kirkbi A/S is buying U.S. video-learning firm Brainpop for $875 million, according to the companies, as the family behind the world’s largest toy maker expands into the education business.
The Danish company said the purchase of Brainpop, which produces short animations used in schools to help children learn everything from math to music, was part of a plan to build a new business pillar. The deal—through which Kirkbi is acquiring Brainpop’s owner FWD Media Inc.—is expected to close Tuesday, the companies said.
“We are definitely on the path to establishing the Lego idea of learning through play in the formal education space,” said
Jørgen Vig Knudstorp,
executive chairman of the Lego Brand Group, the Kirkbi entity that oversees the toy brand.
Kirkbi owns 75% of Lego A/S, whose colorful plastic toy bricks are used by millions of children around the world. It also operates Lego Education, a unit that produces Lego brick sets designed for use in classrooms.
Mr. Knudstorp said the deal for Brainpop wouldn’t give rise to Lego-related videos, with the company set to remain separate from the toy business.
News of the deal comes after Lego last month reported double-digit revenue growth for the first half of the year, brushing aside economic worries to cement its industry sales lead over U.S. rivals
In recent years Kirkbi has sought to expand beyond Lego bricks. In 2019 it was part of a consortium that agreed to buy the operator of Madame Tussauds wax museums and Legoland theme parks. And earlier this year it paid $1 billion for a minority stake in Fortnite maker Epic Games Inc. with a view to jointly developing a child-friendly version of the metaverse.
When it comes to the business of learning, Kirkbi has made roughly 15 minority investments in education-technology companies over the past five years as it started to explore the market, Mr. Knudstorp said. He was then challenged by Kirkbi’s owners, the Kirk Kristiansen family, to move beyond the venture-capital model and find a more mature company to invest in or buy, he said.
New-York based Brainpop, also family owned and with a sizable user base, emerged as a good fit, Mr. Knudstorp said. “This is a company that has substance: it has real know-how to engage children and make them curious and interested,” he said.
Brainpop’s videos, which feature characters such as Moby the robot and usually last around six minutes, reach 25 million children annually across two-thirds of U.S. school districts, the company says. Video topics include math, science and arts among other subjects, and are aimed at different grades.
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The sale to Kirkbi gives Brainpop the opportunity to grow further, said Scott Kirkpatrick, who will continue in his role as Brainpop’s chief executive. Mr. Knudstorp will chair the company.
Though Brainpop’s videos are already available globally and in multiple languages, its audience is mainly American. Kirkbi’s experience of building Lego into a global brand should help Brainpop to develop its international footprint, Mr. Kirkpatrick said.
He also hopes Kirkbi guidance can help Brainpop sell more subscriptions directly to consumers as parents seek more “meaningful screen time” for children at home. Brainpop currently generates most of its revenue from selling subscriptions to schools.
Brainpop’s founder, Avraham Kadar, said he had received many offers for the company since it started in 1999 but that he had little faith the would-be buyers would nurture the brand.
A visit to Lego’s hometown of Billund, Denmark, convinced him that Kirkbi was a different proposition, he said. “We’re very similar in terms of values,” Dr. Kadar said. “They’re professionals, but with a heart.”
Write to Trefor Moss at [email protected]
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