Long-awaited strategic review kicks off with UBS to look at options including �600m-plus sale
All3Media, the independent producer behind shows including Shameless and Midsomer Murders, has kicked off a long-expected strategic review by appointing UBS to look at options including a �600m-plus sale.
The company had been widely expected to start a review ? with a sale considered the most likely outcome ? as soon as possible after being able to show potential suitors solid figures on its business performance in the first six months of its financial year at the end of February.
All3Media appointed UBS, which worked with the company in 2006 when private equity firm Permira took a majority stake, to oversee the review at a board meeting on Wednesday.
Speculation that All3Media may look to sell emerged last year with ITV, which has struggled to grow its own in-house production operation ITV Studios, touted as a potential buyer.
However, one source close to ITV said they believed that if it does seek to make an acquisition it is most likely to look for a "reasonable-sized" business outside the UK.
All3Media, which reported earnings of �50.5m in the year to the end of August 2009, has a growing US business, with revenues expected to exceed $100m this year.
The company is understood to have significantly improved its business performance as the industry recovered from the 2009 advertising recession, with an expectation of earnings in the region of �65m in the 12 months to the end of August this year, with debt thought to be cut to about �250m.
One analyst believes that the business could be worth about �600m ? at a multiple of about 10 times earnings. Elisabeth Murdoch recently sold her production business Shine to News Corporation at about that multiple, while Time Warner's acquisition of Shed Media was at around 8 to 10 times earnings.
Taking into account the quality and range of All3Media's programming output, a 12-times multiple could be attached to a deal, putting the price tag at as much as �780m.
However, there are a number of factors to be considered, including the issue of earn-outs for key creative talent. All3Media is made up of about 16 independent producers the company has acquired.
A second analyst believes that even if a buyer emerges there is unlikely to be any deal, and in particular any chance of achieving a top-end valuation, before September after ALL3Media's full-year figures will be known.
Officially All3Media says that the strategic review will look at a number of options including a share offering, but sources with knowledge of the situation believe finding a buyer is the most likely option.
It is well-known in city circles that Permira has been keen to seek an exit for some time. All3Media management own in excess of 40% of the business.
Businesses which have shown an interest in major media assets include US media companies Time Warner, which is thought more likely to now look to build operations outside the UK following the acquisition of Shed Media, and NBC Universal.
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Source: http://www.guardian.co.uk/media/2011/apr/01/shameless-producer-all3media-review
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