ITV (LON ITV) expands US production arm.
ITV (LSE: ITV) has announced that it will pay $40m for a 61.5% controlling stake in Gurney Productions, as the UK commercial broadcaster continues its transformation plan.
Gurney Productions is a fast-growing producer of factual entertainment and reality programmes for leading US cable television networks, described as a "high-margin business with three quarters of its revenues coming from returnable series" -- indeed, Gurney's 2012 EBITA is forecast to be at least $10m.
For ITV, the acquisition continues the company's progress in building a strong international content business, following its existing position as producer for major US television networks. ITV also has a put and call option to buy the remaining 38.5% of the company, which can be exercised from three years after the initial deal and at the end of year five.
Chief executive Adam Crozier commented:
"Growing ITV Studios is a key part of our strategy to rebalance the Group. Our studios business is already showing strong organic growth and the acquisition of Gurney is an important step forward as we continue to expand our international production capability. We see the US as a key creative market and having a sizeable presence there is central to the expansion of our global content business. Gurney is a great company with terrific programme brands, which will add scale to our already successful US business."
With the shares rising slightly on the news, up 1% at the time of writing to 107.56p, the price is hovering around its 52-week high of 108.64p. ITV is one of the FTSE's best-performing shares.
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> Sam does not own shares in ITV.
