6th Dec 2005 09:30
ITV PLC06 December 2005 ITV plc acquires Friends Reunited Ltd ITV's family of sites becomes largest UK-owned commercial online business ITV plc ("ITV") announced today that it has acquired community web site FriendsReunited Ltd ("Friends Reunited") from the founders and employees of the FriendsReunited business. ITV will acquire the holding company of the group for anexpected initial consideration of up to £120 million to be satisfied by amixture of cash from ITV's existing facilities and the issue of notes and ITVshares. A further payment of up to £55 million may be made during 2009 based onEBITDA performance targets. The acquisition is part of a strategy to build content based businesses whichcreate and monetise direct consumer revenue for ITV. ITV's Consumer team hasalready successfully launched ITV Mobile (www.itv.com/mobile) and ITV Local, abroadband TV trial (www.itvlocal.tv), earlier this year, and will launch a newinteractive TV service, ITV Play, in the New Year. Friends Reunited is forecast to make £12.4 million of revenue and £6.6 millionEBITDA for the year end 2005 and £18.7 million revenue and £8.9 million EBITDAfor 2006. The acquisition is earnings enhancing within the first 12 months andrepresents a multiple of 13.5x, based on 2006 EBITDA. Friends Reunited is the leading reunion web site in the UK and Australia, with15 million registered UK members across their sites - representing 50% of theadult online UK population - and more than 1 million paying subscribers. The business currently comprises of five segments driven by subscriber generatedcontent and the Friends Reunited database: Friends Reunited - a schools alumnisite; Genes Reunited - a genealogy site; Friends Reunited Dating; FriendsReunited Jobs and Connections - a social networking site. With UK broadband penetration set to reach 50% of homes by 2010 and UK internetadvertising spend predicted to rise above £1 billion in 2006, the acquisitionenables ITV to strengthen significantly its current online presence, addingFriends Reunited to ITV.com and ITV Local. The acquisition makes ITV's family of sites the largest UK-owned commercialonline business and will deliver key immediate benefits, including: • ITV.com and Friends Reunited becoming the UK's eighth largest onlinepresence in terms of unique users, with only search and access portals such asGoogle, MSN, Yahoo!, Ebay, and licence-fee funded portal BBC Online rankinghigher. • A powerful consolidated online advertising sales proposition. 53% ofFriends Reunited users are in the ABC1 demographic and 40% are in the 16-34 agerange - both key audiences for advertisers. It will contribute additionaladvertising synergies as ITV internet sales will have increased scale, becominga one-stop-shop for media agencies in the online space. • Online cross promotion, links, brand extension and support betweenITV.com, ITV Local and Friends Reunited. • The development of new services and revenue streams by linking ITV.com,ITV Local and Friends Reunited in areas such as dating, recruitment andclassifieds. • A key role for the Friends Reunited management team in developing ITV'sonline and broadband strategy. • The integration of underlying technology and skills such as databasehandling across the whole of ITV Consumer (ITV Mobile, ITV.com, ITV Local andITV Play), online marketing, and video and mobile handling. • The development of ITV/Friends Reunited online 'passport' to enablesimple, integrated billing and subscription services for users across ITV andFriends Reunited sites. Friends Reunited will be maintained and developed as a separate web presence.However, ITV will integrate the Friends Reunited, ITV.com and ITV Localmanagement teams, bringing unrivalled online expertise, product development anddatabase management skills into ITV. The Friends Reunited team will also becomepart of ITV Local's project management team. Jeff Henry, Director of ITV Consumer said: "This deal combines Britain's most popular commercial broadcaster with some ofBritain's biggest websites and most popular content online. Together they giveITV an unmatched commercial presence in the UK on television and online. "The acquisition of Friends Reunited is also a key step in the delivery of ourstrategy to drive new revenue streams for the company. I am confident thatFriends Reunited's unique sites and comprehensive subscription base, combinedwith ITV's services and vast range of content will prove both compelling andprofitable." Michael Murphy, CEO of Friends Reunited, said: "Our priority has always been to make Friends Reunited bigger and better as themore people there are on the site the more friends our members will be able toreunite with, the more family they will be able to discover and the more chancesof finding a soul mate or even a new job. "When ITV approached us we immediately clicked; they share our values, they're anational institution that is trusted and well loved, and by joining with them,Friends Reunited gets access to a vast audience so we can connect even morepeople even more of the time." Steve Pankhurst, co-founder of Friends Reunited, said: "When we started Friends Reunited in our spare bedroom in July 2000 we had noidea that what began as a hobby would gain phenomenon status, let alone developinto a family of successful websites. However, as the business is now run byMichael and the management team we brought in three years ago and the businessis all grown up, its time for my wife Julie and I to let go knowing it's in safehands." Ends For further information please contact: ITV Media Relations: Brigitte Trafford 0207 620 1620Jim Godfrey 0207 261 8148Simon Rigby, Citigate Dewe Rogerson 0207 638 9571 Investor Relations: James Tibbitts 0207 620 1620Georgina Blackburn 0207 261 3911Caroline Bailey 0207 261 3909 Friends Reunited Carolynne Bull-Edwards or Elizabeth Sheahan01883 717468 / 01883 724357/ 07932 723866or email [email protected] Notes to Editors About ITV ITV is Britain's biggest and most popular commercial broadcaster, with 85% ofpeople in the UK watching ITV in any week. ITV's flagship channel - ITV1 - isthe home of the most popular drama and entertainment programmes on Britishtelevision and ITV2,3 and 4 are among the most popular channels on multi-channeltelevision. About ITVC ITV has established ITV Consumer (ITVC) to build businesses which create andmonetise direct consumer relationships for ITV. Led by Jeff Henry, it isexpanding ITV's family of channels to encompass mobile, broadband and otherservices. ITV Mobile has established itself as the UK's leading entertainmentmobile portal, available on every mobile platform with streamed content anddownloads from hit ITV shows such as I'm A Celebrity... and X Factor, news,entertainment gossip, games, weather, TV listings, phone wallpapers and ringtonedownloads. ITV Local is a broadband TV trial in Brighton and Hastings which includes localnews, weather, local films, an entertainment guide, community video andclassified advertising. The service is targeted at people living in Brighton andHastings but is available to anyone online at www.itvlocal.tv. The pilot - runby ITV Meridian MD Lindsay Charlton - allows ITV to expand into the localclassified advertising market for the first time, enabling people to buy andsell online under the ITV Local brand. The three month trial will test consumerdemand and, if successful, ITV plans to expand the services to other parts ofthe UK. To be launched next year, ITV Play is an interactive brand which will feature 'participation TV' quizzes and other play formats across ITV's family of digitalchannels, on mobile and online. About Friends Reunited Founded by North London-based husband and wife team Steve and Julie Pankhurstand their business partner Jason Porter, Friends Reunited was launched in July2000 so that people could get in contact with their old school friends. Acombination of word of mouth and immense media attention has propelled the siteto phenomenon status, expanding beyond the school friends proposition to includeworkplaces, teams/clubs and streets. To help take the company to the next stage in its development, in February 2003the founders opted to step back and bring in a management team. Headed byMichael Murphy (former COO of Financial Times), Friends Reunited hassuccessfully retained the core ethos at the same time as tripling profits andexpanding the family of sites to include the UK's largest genealogy site GenesReunited, leading match-making service Friends Reunited Dating, Friends ReunitedJobs and social networking site Friends Reunited Connections. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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