ITV shares were up 1.2% to 68.1p in early morning trading on Tuesday, following the company’s acquisition of a 79.5% interest in Plimsoll Productions for approximately £103.5 million from private equity firm LDC, Plimsoll Productions CEO Grant Mansfield and other existing company shareholders.
The agreement values the company, which is currently the largest independent producer of natural history programmes, at £131 million.
The remaining 20.5% of share capital will reportedly be held by Mansfield and other members of the management team and strategic investors of Plimsoll Productions.
ITV confirmed that there are Call and Put arrangements in place which will provide the company with the option of acquiring the remaining 20.5%, with the consideration payable dependent on Plimsoll’s profit growth performance in the term until December 2027.
The cash amount is capped at £79.5 million and is payable from 2028 onwards.
Plimsoll Productions generated an EBITDA of £10 million for FY 2021. ITV added that under its ownership, Plimsoll will report to a calendar year and under ITV’s episodic revenue recognition policy.
Plimsoll Productions is estimated to deliver a forecasted EBITDA of approximately £5.5 million in HY2 2022 on this basis.
ITV highlighted that the transaction will be earnings accretive from day one, and is expected to accelerate ITV Studios’ international expansion and its business with global streaming platforms.
The transaction is reportedly set to be financed through existing cash resources.
The move comes as part of ITV’s strategy to broaden its reach in the world of streaming entertainment, with Plimsoll Production’s strong ties to global streamers set to deepen ITV’s relationships in the sector.
ITV confirmed that Grant Mansfield and his senior management and creatives are set to stay with the company and manage the business, and would be working alongside ITV Studios managing director Julian Bellamy, Unscripted UK director Angela Jain, and the rest of their team.
“Growing ITV Studios with an exciting pipeline of premium programmes is core to our strategy as we further diversify the business by genre, by geography, by customer and grow ahead of the market,” said ITV CEO Carolyn McCall.
“Through Plimsoll Productions, as a Studio, we can continue to capitalise on the growing demand for natural history and factual programming and I am really pleased to welcome Grant and the team.”