ITV acquires controlling stake in US reality TV producer

7th May 2014 07:56

Broadcaster ITV has acquired an 80 per cent controlling interest in Leftfield Entertainment Group, making ITV Studios US Group the largest unscripted independent producer in the US. The acquisition, which has been made for an initial cash payment of $360m, will be earnings-enhancing from day one. Producer of such reality shows as 'Pawn Stars' and 'Real Housewives of New Jersey', Leftfield is an independent producer of reality programmes that owns Sirens Media and two joint ventures, Loud Television and Outpost Entertainment. Together these businesses produce more than 300 hours of unscripted programming for over 30 US networks. Last year the firm generated earnings before interest, tax, depreciation and amortisation (EBITDA) of $38m on a proforma basis, with ITV saying it expects Leftfield 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". It also explained that there were put and call options in place to buy the remaining 20% 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% of Leftfield is $800m, including the initial payment. This would only be paid if Leftfield delivers average EBITDA of at least $130m per annum between the third and fifth years post-acquisition. Adam Crozier, the Chief Executive of ITV, 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% 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."NR