24th Jun 2015 11:16
LONDON (Alliance News) - ITV PLC said Wednesday it has agreed to buy the producer of shows including 'Educating Yorkshire' and 'The Hotel Inspector' for a maximum of GBP280 million.
ITV will acquire Boom Supervisory Ltd, which is the holding company of the Twofour Group, from the private equity arm of Lloyds Banking Group for an initial cash consideration of GBP55 million. This will give it a 75% interest in Twofour, and it has a put and call option to buy up the remaining 25% that can be exercised at the end of 2017, and between the end of GBP2019 and 2021.
Additionally, Twofour owns a 51% stake in independent studio Mainstreet Pictures has a put and call option to acquire the remaining 49% of Mainstreet that can be exercised between 2018 and 2023.
Mainstreet was set up by ITV executives Laura Mackie and Sally Haynes, who were responsible for bringing ITV's successful 'Downtown Abbey' series to the air.
The total maximum consideration for Twofour and the share in Mainstreet is GBP280 million with contingent payments depending on both businesses delivering exceptional profit growth to GBP60 million in total over the payment period.
Twofour posted earnings before interest, tax, depreciation and amortisation of GBP5 million in 2014.
The acquisition is expected to be immediately earnings enhancing, ITV said.
ITV has been making a series of buys to bolster its content production, scooping up the producer behind 'Poldark' Mammoth Screen Ltd earlier this month, and Dutch media tycoon John De Mol Jr's Talpa Media BV for up to EUR1.1 billion in March.
"Great creative talent, fantastic content and brilliant production expertise are central to ITV Studios' strategy, so I'm delighted that the Twofour Group is joining our family of production companies as we continue to boost ITV Studios' growth in the UK and internationally," said Managing Director of ITV Studios Kevin Lygo in a statement.
Shares in ITV are trading down 0.2% at 272.65 pence Wednesday afternoon.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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