Reese Witherspoon buys back Hello Sunshine at a steep discount

American actress and producer Reese Witherspoon is buying back Hello Sunshine, the production company she founded, from Blackstone-backed Candle Media, five years after selling it in a deal that valued the business at $900 million.

Witherspoon is acquiring a majority stake together with Mediawan, a Paris-based production group, the companies announced on Tuesday. Financial terms were not disclosed. Axios, citing people familiar with the matter, reported the price was in the "low- to mid-eight-figure range," and TheWrap reported the same range from a person familiar with the deal.

That would put the price at a small fraction of the 2021 valuation. TheWrap noted that even at $50 million, the price would represent a 94% drop, though it cautioned that the deal terms may not fully match the company's value. "We were just wrong," an individual close to Candle Media told the publication. A veteran financier told Deadline the sale probably costs Candle "several hundred million dollars." Hello Sunshine, Mediawan and Candle declined to comment on the price, according to Axios.

A homecoming deal

Witherspoon, 50, founded Hello Sunshine in 2016 with backing from Peter Chernin's investment firm, The Chernin Group. The company built its name on television and film adapted from books and centered on women, including "Big Little Lies," "The Morning Show," "Daisy Jones & The Six" and "Where the Crawdads Sing." Reese's Book Club, which picks a novel each month and has become a launch pad for adaptations, will remain central to the business.

In a statement, Witherspoon called Mediawan "the perfect home for this new media landscape" and described the deal as "a homecoming." She thanked Blackstone and Candle.

Pierre-Antoine Capton, co-founder and chief executive of Mediawan, said Hello Sunshine has "an extraordinary track record of telling premium stories" and called Witherspoon a "generational talent." Chernin, now a Mediawan board member, and Scott Manson, chief executive of Mediawan in North America, called Hello Sunshine "the premier company for women's storytelling."

Hello Sunshine co-founder Seth Rodsky will join the company's board alongside representatives of Witherspoon and Mediawan.

The deal adds Hello Sunshine to a growing group of independent studios under Mediawan, which has bought Chernin Entertainment, Brad Pitt's Plan B Entertainment and See-Saw Films.

Candle Media's retreat

The sale marks a reversal for Candle Media, which was launched five years ago with $2 billion from private equity firm Blackstone by former Walt Disney Co. executives Kevin Mayer and Tom Staggs. The pair had worked on Disney's acquisitions of Pixar, Marvel and Lucasfilm and set out to build a new media group through acquisitions.

Hello Sunshine was one of Candle's first purchases. The company later paid nearly $3 billion for Moonbug, the owner of children's brand CoComelon, which Deadline described as Candle's main remaining asset. A sale of Moonbug has been "actively explored" but is not imminent, a source told Deadline.

Candle has since cut staff and restructured. In February it sold a majority stake in digital media company ATTN back to its co-founders, Matthew Segal and Jarrett Moreno, Axios reported.

Moelis & Co. advised Candle Media, and Kirkland & Ellis represented Candle and Hello Sunshine. Latham & Watkins represented Witherspoon, while Gibson Dunn represented Mediawan, according to TheWrap.

The buyback returns control of Witherspoon's best-known business to its founder at a far lower price than Candle paid for it.