UK broadcaster ITV has confirmed it is buying Plymouth-based production and distribution firm TwoFour Group.
The deal will see ITV pay LDC, the private equity arm of Lloyds Banking Group, an initial £55 million for a 75% stake in TwoFour parent holding company Boom Supervisory Ltd, with a put and call option for the other 25% included in the agreement.
The deal continues ITV’s spending spree, which has seen it buy US production group Leftfield Entertainment, John de Mol’s Talpa Media and various other production entities such as Thinkfactory Media, High Noon Entertainment, Mammoth Screen and The Garden.
These were all part of a long-term plan to switch revenue-generation away from TV ad revenues and towards more stable international format revenues.
TwoFour has offices in the UK and US and is behind shows such as Educating Yorkshire, The Jump (pictured), Posh Pawn, The Hotel Inspector and Animal Odd Couples. It delivered EBITA of £5 million last year.
The firm produced 1,200 hours in 2014 across its productions subsidiaries, which comprise Twofour, Boomerang, Oxford Scientific Films, Indus, Boom Cymru, Twofour America and scripted producer Delightful Industries.
ITV will be able to buy the outstanding 25% at the end of 2017 or between the end of 2019 and 2021 if it exercises its option to do so.
Furthermore, ITV will have the option to buy the 49% of TwoFour-owned drama prodco Mainstreet Pictures if it exercises a separate put and call option between 2018 and 2023. Former ITV execs Laura Mackie and Sally Haynes launched Mainstreet with Twofour Group predecessor Boom Pictures in 2013.
The total maximum consideration for the remaining TwoFour and Mainstreet shares is £280 million depending on both firms delivering “exceptional” profit growth of £60 million over the agreed option periods.
For TwoFour, the sale to ITV comes after Boom Pictures and TwoFour Broadcast merged in October 2013, with former BBC One controller Lorraine Heggessey attached to the management board.
She subsequently left in acrimonious circumstances and the group was restructured and renamed TwoFour Group, with Melanie Leach installed as CEO. The firm is currently producing ITV thriller Unforgotten and BBC One comedy I Want My Wife Back, plus Education Cardiff for Channel 4.
It also operates rights arm TwoFour Rights, which has a catalogue of more than 550 finished hours.
“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 ITV Studios managing director Kevin Lygo.
“The management teams across the Twofour Group are delighted to be joining ITV Studios,” added TwoFour boss Leach. “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.”