We are delighted to have provided financial due diligence services to Moonbug Entertainment Ltd for the acquisition of the Cocomelon and Blippi YouTube channels.

Moonbug Entertainment Ltd is building a kids media empire for the YouTube generation. The London-based company has acquired two of the most popular YouTube brands for kids: Cocomelon, an animated show that is the most-viewed channel on the entire site, and Blippi, a program hosted by entertainer Stevin John.

Due to these acquisitions, Moonbug now operates the largest network of kids channels on YouTube worldwide, encompassing 235 million subscribers and generating more than 7 billion views per month. In addition to Cocomelon and Blippi, Moonbug also owns Little Baby Bum, another YouTube channel with more than 30 million subscribers, which makes videos set to nursery rhymes.

How we helped

Our Corporate Finance team’s financial due diligence experts provided assurance to the investment teams and reduced the risks associated with the transaction. The sophistication of the record keeping was lower than expected given the size of the transaction, so a key part of our work was to generate accurate accounting records from the information available.

We also provided key insights on the forecasts of the businesses and their YouTube channels. There are several opportunities for Moonbug to leverage the content creation, such as expanding into new languages, merchandise development and the use of other platforms, such as Netflix. We assisted in generating these forecasts in order to map out the future of Moonbug.

"It’s been a pleasure working with Buzzacott on Blippi and Cocomelon. Alex and the team provided thorough financial analysis and due diligence and we look forward to working with Buzzacott again on future acquisitions.” 

Fletcher Williams, Moonbug

Challenges overcome

Other than the limited accounting information, the largest challenge was that the transaction had to complete in a COVID-19 world. This has affected the YouTube channel views as well as the revenue generated per video. Getting a full understanding of this and forecasting the future impact was key for the deals to proceed. The completion of this transaction during the pandemic is a positive sign that deals can still proceed when the market may appear uncertain.