Boat Rocker and Blue Ant Merge: A Strategic Play for Media Dominance

The merger between Blue Ant Media (TSX: BAM.A) and Boat Rocker Media (TSX: BRMI) marks a pivotal moment in the Canadian media landscape. By combining Blue Ant's global broadcasting infrastructure with Boat Rocker's acclaimed content library, the Resulting Issuer emerges as a scalable media powerhouse. Investors should take note: this transaction isn't just a consolidation—it's a calculated move to unlock undervalued assets, capitalize on synergies, and position the new entity for long-term growth.

The 125% Premium: A Fairness Opinion Backed by Numbers

The deal's cornerstone is the 125% premium to Boat Rocker's March 21 closing price of C$0.80, valuing shares at C$1.80 pre-consolidation. This premium isn't arbitrary: Scotia Capital's fairness opinion validates the offer, citing a fair market value range of C$1.50–C$1.91 for Boat Rocker shares. Crucially, the 145.1% premium over the 30-day VWAP underscores the undervaluation of Boat Rocker's shares prior to the announcement.

Investors can see the immediate market reaction: shares surged on the news, reflecting confidence in the merger's value proposition.

Strategic Rationale: Synergies in Content and Control

The merger's brilliance lies in its dual focus on Canadian control and global reach:
1. Blue Ant's Canadian Backbone:
- Blue Ant's ownership of seven specialty channels (e.g., BBC Earth, Smithsonian Channel) ensures compliance with Canadian broadcast regulations.
- 77.5% voting control via Multiple Voting Shares (MVS) held by CEO Michael MacMillan maintains Canadian governance, a non-negotiable for regulatory approval.

1. Boat Rocker's Content Engine:
2. The Resulting Issuer absorbs Boat Rocker's three top production companies (Insight Productions, Jam Filled, Proper Television), generating C$118M in 2024 revenue. These studios specialize in unscripted programming—a high-margin, globally marketable genre—complementing Blue Ant's existing library of 7,800 hours of content.
3. Global distribution leverage: Boat Rocker's slate includes hits like Invasion (Apple TV+) and Palm Royale, which will now benefit from Blue Ant's international sales network.

The Management Buyout: Slimming Down for Efficiency

The carve-out of Boat Rocker's global scripted and kids' divisions to IDJCo (led by co-founders) is no accident. By transferring these assets via a C$18M promissory note, the Resulting Issuer:
- Eliminates underperforming segments: Focused on high-margin unscripted content, the merged entity avoids dilution from lower-margin scripted projects.
- Secures immediate liquidity: The C$17M from The Initial Group sale and C$34.7M performance-linked payment (tied to 2025 earnings) provide a debt-free cash buffer of ~C$25.5M.

Why This is a Compelling Entry Point

The transaction's debt-free structure and cash-rich balance sheet reduce execution risk. With 47% of revenue already coming from international markets, the Resulting Issuer is primed to capitalize on rising global demand for streaming content.

Blue Ant's 16% YoY revenue growth to C$196M in 2024 signals scalability, while Boat Rocker's premium content adds a 30% revenue uplift (via the three studios). This combination could push the Resulting Issuer's EBITDA higher, especially if the performance payment materializes.

Risks and Considerations

• Regulatory hurdles: The June 2025 closing timeline assumes swift approvals, but delays could pressure valuation.
• Content pipeline execution: The merged entity must maintain the quality of Boat Rocker's slate to justify the premium.

Investment Takeaway: A Buy on Approval

The merger's approval represents a high-conviction opportunity for investors in undervalued media stocks. With no debt, a proven international distribution network, and a premium content library, the Resulting Issuer is positioned to outperform peers in 2025 and beyond.

Actionable Advice:
- Buy on closing: Once the merger closes in June, the stock could re-rate upward as synergies materialize.
- Hold for the long term: The combination of Canadian tax incentives (Blue Ant's core strength) and Boat Rocker's hit-driven content creates a moat against streaming giants.

In a sector where valuation discipline is key, this merger checks all the boxes: fair pricing, operational focus, and global scale. For investors, it's not just a bet on media—it's a bet on the future of entertainment.