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ITV Studios acquires 80% stake in Leftfield Entertainment for $360 mn
MUMBAI: UK TV giant ITV Studios has acquired controlling interest in Leftfield Entertainment Group from its founder and CEO Brent Montgomery.
With this purchase of 80 per cent stake in the production company, ITV Studios becomes the largest unscripted independent producer in the US.
The combined businesses will account for production of over 300 hours of unscripted content for 30 US networks. The portfolio includes ‘Pawn Stars’, ‘Counting Cars’, ‘American Restoration’ and ‘Real Housewives of New Jersey’.
ITV Studios will initially pay cash of $360 million for 80 per cent of Leftfield, with further potential payments dependent upon Leftfield’s continued delivery of significant profit growth.
Brent Montgomery will remain CEO of Leftfield Entertainment Group under ITV’s ownership.
ITV CEO Adam Crozier said, “Leftfield is a fantastic success story, rapidly growing from a single pilot to become one of the biggest indies in the US. The team has combined creativity with strong production expertise, with over 70 per cent of the business coming from returning series and a pipeline of new ideas coming through in 2014 and into 2015 that is really encouraging. We are delighted that Brent and the team are joining ITV in what represents a significant addition to ITV Studios as we continue to build our global content business over the long term.”
Leftfield has been termed as a fast growing US independent producer of reality programmes who sold its first series in 2008. It also owns Sirens Media and has established two joint ventures including Loud Television and Outpost Entertainment.
Montgomery added, “This is an incredibly exciting time at Leftfield, as our agreement with ITV marks a major milestone in the company’s evolution and I am looking forward to working with them for the next five years and beyond. Two decades into the explosion of unscripted television, our business is changing more rapidly than ever. We’re confident that, together with our new partners at ITV, we will continue to deliver breakthrough programming for buyers around the world.”
Leftfield delivered $38 million of EBITDA on a proforma basis in 2013 and ITV expects it to continue to deliver strong growth at a high margin into 2014 and beyond as the benefit of its acquisition of Sirens and its new joint ventures start to come through.
There are put and call options in place to buy the remaining 20 per cent stake of Leftfield, under which a call can be exercised three years after the initial deal and a put and call at the end of year five.
The total maximum consideration for 100 per cent of Leftfield is $800 million, including the initial payment. This would only be paid if Leftfield delivers average EBITDA of at least $130 million per annum between years three and five.
The acquisition of Leftfield represents considerable progress in ITV’s strategy of building a strong international content business, particularly in the US. The deal will enable them to increase their presence on both the east and west coasts.
Leftfield Entertainment was formed in 2013 when Leftfield Pictures acquired Sirens Media. The gross assets of Leftfield as on 31 December 2013 were $116 million.