LDC sells Twofour to ITV for £55m

Alice Murray
25 June 2015

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LDC has sold Boom Supervisory, the holding company of TV production group Twofour, to ITV Studios for ТЃ55m.

The deal saw ITV paying an initial cash consideration of £55m for 75% of the company. The management's 25% holding in the business is subject to a put-and-call option, which can be exercised in 2017 and between the end of 2019 and 2021. No further payment will be made if trailing two-year average EBITA is £5m or lower; a payment of up to £5m will be made if trailing two-year average EBITA is £7m; a payment of up to £65m will be paid if trailing two-year average EBITA is £30m or higher, with graduated payments between these thresholds.

Following the deal, Twofour will continue to operate as a standalone brand and its management team will continue with the business.

The transaction does not include content company One Two Four, which remains a standalone business backed by LDC.

Previous funding
LDC acquired AIM-listed media production company Boomerang in July 2012, in a take-private worth close to £8m, according to unquote" data. The business was acquired by newco Boom Pictures, which became the company's trading name. At the time of the deal, Boom Pictures had a market cap of £6.65m, revenues of £37m and EBITDA of £1.12m.

In 2013, LDC backed Boom Pictures' merger with the Twofour group with follow-on capital. In July 2014, the captive GP split the group into two separate businesses, Twofour Group and content company One Two Four.

Company
Twofour is best known for UK TV programmes "Educating Yorkshire" and "The Hotel Inspector".

Established in 1989, Twofour is a group of production companies based in the UK and US, producing drama, comedy, factual, children's and entertainment programmes. Labels include Twofour, Twofour America, Boomerang, Oxford Scientific Films, Indus, Boom Cymru and Delightful Industries.

In 2014, the group generated EBITDA of £5m. The company has offices in London, Plymouth, Cardiff and Los Angeles.

People
David Andrews is the investment director at LDC responsible for the deal. Malanie Leach is CEO of Twofour Group. Kevin Lygo is managing director of ITV Studios.

Advisers
Vendor - CMS, James Grimwood, Gemma Sainsbury, Narinder Jugpal, Katherine Winny (Legal); Livingstone, Richard Fetterman, James Local, Tom Stoten (Corporate finance).