Comic-book legend Stan Lee’s Pow Entertainment has been acquired by Hong Kong’s Camsing International Holding Ltd. for $11.5 million.
Under terms of the deal, Camsing, a brand licensing, merchandising, and sports and entertainment marketing company, will acquire Pow’s library of intellectual property for film, TV, games, virtual reality, animation, live events, tours, comics, and publishing, according to a joint statement.
The deal involves a reverse merger, according to documents filed with the Stock Exchange of Hong Kong Ltd. Pow Entertainment will survive in name, but the company would be controlled by Camsing subsidiary First Creative, which would hold an 85 percent stake.
The 94-year-old Lee, Pow chairman and creator of such powerhouse entertainment franchises as Spider-Man, the X-Men, and Incredible Hulk during his long career with Marvel Comics, and Gill Champion, Pow’s chief executive, would each receive a 7.5 percent equity stake.
Pow, which stands for Purveyors of Wonder, was traded over the counter until January, when it filed documents with the Securities and Exchange Commission to be delisted. In its March 2016 annual report, the company said Lee owned 24.7 percent of Pow and Champion owned 18.7 percent. Walt Disney Co.’s Catalyst Investments owned 10 percent of the company, according to the filing.
Lee will continue as chief creative officer of Pow, with Camsing U.S. Vice President Shane Duffy becoming chief executive, according to the joint statement. Champion will transition to the role of president.
“I am enthusiastic to continue with the next chapter of my career and to be involved with the continued development and production of so many of the new projects that we developed while at Pow! Entertainment,” Lee said in the statement. “The Camsing merger will provide additional resources for development of these projects and access to new markets.”
Camsing Chief Executive Vivian Lo said the merger would bring “significant synergy by combining Pow!’s existing intellectual property library and Camsing’s strong IP merchandising network in China, therefore creating value for our shareholders.”
Lo called Lee a global proven name and said Pow would develop another Marvel in the Asian market.
Neither Lee nor Camsing executives were available for further comment.
Lindsay Conner, co-chair of the entertainment and media group at West L.A. law firm Manatt Phelps & Phillips, said the deal shows American entertainment brands still have strong name recognition around the world.
“Camsing clearly believes they have a winner in the Stan Lee properties and can monetize those properties in a variety of media in China,” said Conner, who has represented several Chinese companies in negotiations with L.A. entertainment studios.
The acquisition provides a solution to Pow’s financial difficulties. The company had relied on an agreement with Silver Creek Pictures Inc., a Disney affiliate, for the bulk of its revenue between 2010 and 2014. The deal, which provided $700,000 a year to the company and an additional $1.25 million in consulting payments to Lee, lapsed at the end of 2014, leaving Pow scrambling.
The company said in its annual report in 2015 that it was exploring other sources of revenues but that operational requirements could force the company to scale back operations, defer executive salaries, and reduce staff.
In Pow’s last quarterly report, filed in November, the company said it had lost $1.2 million in the first nine months of 2016.
It had $5.3 million in overall debt and relied on a $680,000 loan from Hong Kong-based Ricco Capital Holdings Ltd. and $183,000 in revenue from its “Stan Lee’s Lucky Man,” a show it produced for British broadcaster Sky1, for operating expenses, according to SEC filings.
