AT&T (t.us) agreed to sell its animation video subsidiary, Crunchyroll, to sne.us's Funimation Global Group for a $1.175 billion cash deal.
Crunchyroll is part of AT&T's Warner Media business, which provides direct-to-consumer animation services with over 3 million svod subscribers. Founded in 2006, the company offers avod, mobile games, comics and more.
AT&T CEO John Stankey said the day before the deal was announced that the company would continue to take steps to monetize non-core strategic assets. He said a strong cash flow and capital allocation strategy will give the company flexibility and the ability to invest in fiber, 5G and HBO MAX. He expects free cash flow to reach $26 billion next year (excluding certain potential divestitures) and a total investment capital of $21 billion.
In response, Morgan Stanley analyst Simon Flannery reiterated his "buy" rating on the stock with a price target of $36.