ITV acquires Twofour Group
ITV plc today announced that it has agreed to acquire Boom Supervisory Limited, the holding company of the Twofour Group, as ITV continues to strengthen its global content business. The acquisition, which will be earnings enhancing from day one, supports ITV Studios' growth internationally by increasing its exposure to factual entertainment formats and drama and bringing new creative talent to ITV.
Twofour is a fast growing group of companies that produced over 1,200 hours of programming in 2014. The group's production labels, based in the UK and US, include Twofour, Twofour America, Boomerang, Oxford Scientific Films, Indus, Boom Cymru and the scripted producer Delightful Industries. The group has produced hit shows including Educating Yorkshire, The Jump, Posh Pawn, The Hotel Inspector and Animal Odd Couples.
Twofour also owns 51% of drama indie Mainstreet Pictures, and has a distribution business, Twofour Rights, which owns a diverse catalogue of over 550 hours of finished programming and formats.
ITV, which acquires Twofour from majority shareholder LDC, the private equity arm of Lloyds Banking Group, will pay an initial cash consideration of £55 million for 75% of the Group. There is a put and call option for the remaining 25% that can be exercised at the end of 2017 and between the end of 2019 and 2021, with any further payment subject to minimum average EBITA thresholds. Twofour delivered £5 million EBITDA in 2014.
Additionally, Twofour has a put and call option to acquire the remaining 49% of its subsidiary Mainstreet that can be exercised between 2018 and 2023.
The total maximum consideration for Twofour and the remaining 49% of Mainstreet is £280 million with contingent payments dependent on both businesses delivering exceptional profit growth to £60 million in aggregate over the payment period.
Kevin Lygo, Managing Director ITV Studios said: "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."
Melanie Leach, Chief Executive of Twofour said: "The management teams across the Twofour Group are delighted to be joining ITV Studios. ITVS has a great track record in backing creative talent and we look forward to working with them as we continue to grow the group in the UK and internationally."