Background
I only have a few theories. Most of my theories were based on WOW being acquired, not growing inorganically. Being acquired seemed like the likelier scenario, when WOW announced the strategic review. I thought the two most likely companies to acquire WOW were Netflix and Sony.
A lot of WOW series are going to Netflix and Netflix is trying to start their own animation studio, from scratch. While Netflix has not done large acquisitions, it seemed possible they could buy a small studio to jump start their efforts.
Sony, I thought, owned Powerhouse Studios. I'm not sure now. I can't find the link where I got that info. But, Sony has a deal with both Netflix and Disney +, so buying a studio supplying product to Netflix, mostly, wouldn't be a problem. Sony also had a relationship with Siebert and Frederator. Sony is also becoming a big streaming player for anime. Sony bought Funmation (and other anime streaming services around the world) and is in the process of buying Crunchyroll. Animated series have a much lower cost basis than live-action. Sony could build a large streaming platform to rival Netflix at a fraction of the cost. Most of the anime has come out of Japan, but more countries have home produced animated series. Frederator Networks claims to have 200 million subscribers, most content is adult oriented, and WOW has the license for Castlevania animated series.
If WOW were to be acquired the company would need to be valued based on the better financials (which I don't think are baked into the share price)
During the annual meeting "inorganic growth" was mentioned. I had to rework my theories to accommodate WOW growing and not being acquired.
WOW does not have much cash reserves for acquiring other companies. WOW would have to use stock to buy companies or sell stock for cash to buy other companies. WOW would still need the company to be valued.
1) I thought Sony would do an equity investment buying 15 to < 50% of WOW. It's still a potential future acquisition for Sony and Sony could work out a deal for content/services from WOW.
WOW has good working relationship with Powerhouse. All animation studios seem to be hiring,a combination of resources makes sense.
1-b) Netflix could do the equity investment, just to lock up a content source and provide a more stable content source.
2) Acquiring Kevin Kolde's Project 51 Productions studio. It's the company that got the license for Castlevania. I'm uncertain to what extent WOW has the license to Castlevania. WOW has claimed to have the license, Project 51 Productions is mentioned more than WOW when the Castlevania series is discussed.
3) Mergers/acquisitions of other Canadian animation studios. Acquiring with stock makes sense here. The companies would have an equity stake in the larger company rather than cash and becoming employees.
4) Acquiring outside of Canada. I'm thinking mostly small Asian studios. Having cash makes sense here. It would be a consolidation of small studios for content and animation worker resources (companies are hiring).
Edit
I have not looked into the possibility of toy companies Mattel or Spinmaster doing the equity investment (or acquisition). It might makes sense for these type of companies have animation studios (making content based on their toys). But, it probably looks cheaper to the toy companies to commission animated series on an individual basis. I doubt they have considered an animation production shortage as more animated series are being commissioned by the large streaming services.
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