The cash deal is by far ITV’s largest since it began snapping up international production groups such as Leftfield Entertainment, Thinkfactory Media, Big Talk Productions, High Noon Entertainment and The Garden.
This means Talpa formats such as The Voice, Utopia and Dating in the Dark now sit within the ITV fold, with Talpa founder John de Mol (left) and his senior management team remaining with the company and now working closely with Kevin Lygo (below, right), managing director of ITV’s production and distribution wing, ITV Studios.
ITV will pay an initial US$500 million for 100% the company, but this does not include de Mol’s 33% stake in Dutch broadcaster SBS or his record label, 8ball Music.
The total maximum payment, dependent on future performance is US$1.1 billion. This is contigent on targets over an eight-year period that ties de Mol to the firm for that length of time.
Industry insiders had questioned how ITV could structure a deal and keep de Mol tied in, after news of the potential acquisition surfaced last week.
ITV noted that under de Mol and CEO Pim Schmitz, Amsterdam-based Talpa had made €233 million (US$247.1 million) in the year to December 31, 2014 on earnings before interest, tax and amortisation of €61 million.
Publicly-listed ITV said it expected Talpa to immediately begin delivering revenues to ITV Studios.
“Great content is at the heart of ITV’s growth strategy and the acquisition of Talpa builds on the success of our international content business and is absolutely in line with our desire to create and own formats that travel,” said ITV CEO Adam Crozier.
“John de Mol and his team have an incredible track record of doing that consistently over many years and I’m delighted to welcome them to the ITV family. This is a great opportunity for ITV to accelerate its progress in building a global content business of scale.”
For de Mol, it marks another payday after twice cashing out on Endemol, the formats giant he co-founded with Joop van den Ende.
“Of all the potential partners for Talpa, there’s no doubt ITV is the best fit,” he said. “When it comes to the importance of content, the strategy of both successful companies is exactly the same and for Talpa this represents a fantastic opportunity for strong further growth. It also enables me personally to concentrate and focus even more on creating new, groundbreaking content.”
De Mol founded founded Talpa – which means ‘mole’ in Latin – in 2004 after exiting Endemol. He had sold his shareholding the company to Spain’s Telefonica four years prior and used some of that cash to establish the new firm.
He later returned to Endemol as a key shareholder as part of a consortium also including Italian broadcaster Mediaset. He offloaded his stake to Apollo Global Management last year, before Endemol merged with Shine Group and Core Media.
De Mol told TBI in 2013 he expected to see between three and five ulta-consolidated indies dominating the international production business by the end of 2017. This has been followed by the emergence of Endemol Shine Group, Discovery Communications and Liberty Global’s deal for All3Media and now Talpa joining forces with ITV.