US media giants Discovery Communications and Liberty Global have confirmed they are joining forces to acquire European producer and distributor All3Media in a tie-up valuing the company at close to US$1bn.
The 50/50 joint venture will cost Liberty and Discovery £550m (US$930m), which falls short of the £750m All3Media’s headge fund owner Permira was looking for, but still represents a substantial £230m profit on its acquisition of the company in 2006.
Liberty and Discovery will each contribute £90m in cash with the rest of the deal funded through a combination of equity and non-recourse credit facilities raised at All3Media.
All3Media is based in London with a presence in the US, Germany, Netherlands and New Zealand and a portolio of production companies including Lime Pictures, Maverick Television, Lion Television, Studio Lambert and Optomen. Its revenues for the last financial year were £505m.
Confirming the deal, Discovery Communications and Liberty Global said they will preserve All3Media’s creative independence and focus on serving its global broadcasting partners. The All3Media group will continue to operate under its own name with its own executive management team and its existing operating model as a standalone, independently managed entity.
The deal is expected to conclude in the third quarter, subject to regulatory approval.
In December 2012, Discovery paid US$1.7bn for 12 SBS channels in the Nordic region that belonged to Germany’s ProSiebenSat.1 and €170m (US$222m) for a stake in channels belonging to France’s TF1, including Eurosport.
It has since taken an early option to increase its share in Eurosport to a controlling stake.
Discovery was also rated as the favourite to acquire UK terrestrial Channel 5 from Richard Desmond’s Northern & Shell, but C21 understands that the US firm baulked at Desmond’s £600m asking price for the channel he bought for just £104m four years ago. C5 has since been acquired by US cable channels operator Viacom.
Liberty Global, meanwhile, has operations in 14 countries, including Virgin Media in the UK. The firm has, however, recently signaled its apparent exit from the content business with the sale of Chellomedia to AMC Networks.