ITV plc ("ITV") announced today that it has acquired community web site Friends Reunited Ltd ("Friends Reunited") from the founders and employees of the Friends Reunited business. ITV will acquire the holding company of the group for an expected initial consideration of up to £120 million to be satisfied by a mixture of cash from ITV's existing facilities and the issue of notes and ITV shares. A further payment of up to £55 million may be made during 2009 based on EBITDA performance targets.
Friends Reunited is forecast to make £12.4 million of revenue and £6.6 million EBITDA for the year end 2005 and £18.7 million revenue and £8.9 million EBITDA for 2006. The acquisition is earnings enhancing within the first 12 months and represents a multiple of 13.5x, based on 2006 EBITDA.
Friends Reunited is the leading reunion web site in the UK and Australia, with 15 million registered UK members across their sites - representing 50% of the adult online UK population - and more than 1 million paying subscribers.
The business currently comprises of five segments driven by subscriber generated content and the Friends Reunited database: Friends Reunited - a schools alumni site; Genes Reunited - a genealogy site; Friends Reunited Dating; Friends Reunited Jobs and Connections - a social networking site.
With UK broadband penetration set to reach 50% of homes by 2010 and UK internet advertising spend predicted to rise above £1 billion in 2006, the acquisition enables ITV to strengthen significantly its current online presence, adding Friends Reunited to ITV.com and ITV Local - a broadband TV trial in Brighton and Hastings.
The acquisition is part of a strategy to build content based businesses which create and monetise direct consumer revenue for ITV. ITV's Consumer team has already successfully launched ITV Mobile (www.itv.com/mobile) and ITV Local (www.itvlocal.tv) earlier this year, and will launch a new Interactive TV service, ITV Play, in the New Year.
The acquisition makes ITV's family of sites the largest UK-owned commercial online business and will deliver key immediate benefits, including:
Friends Reunited will be maintained and developed as a separate web presence. However, ITV will integrate the Friends Reunited, ITV.com and ITV Local management teams, bringing unrivalled online expertise, product development and database management skills into ITV. The Friends Reunited team will also become part of ITV Local's project management team.
"This deal combines Britain's most popular commercial broadcaster with some of Britain's biggest websites and most popular content online. Together they give ITV an unmatched commercial presence in the UK > on television and online.
"The acquisition of Friends Reunited is also a key step in the delivery of our strategy to drive new revenue streams for the company. I am confident that Friends Reunited's unique sites and comprehensive subscription base, combined with ITV's services and vast range of content will prove both compelling and profitable."
"Our priority has always been to make Friends Reunited bigger and better as the more people there are on the site the more friends our members will be able to reunite with, the more family they will be able to discover and the more chances of finding a soul mate or even a new job.
"When ITV approached us we immediately clicked; they share our values, they're a national institution that is trusted and well loved, and by joining with them, Friends Reunited gets access to a vast audience so we can connect even more people even more of the time."
"When we started Friends Reunited in our spare bedroom in July 2000 we had no idea that what began as a hobby would gain phenomenon status, let alone develop into a family of successful websites. However, as the business is now run by Michael and the management team we brought in three years ago and the business is all grown up, its time for my wife Julie and I to let go knowing it's in safe hands."
For further information please contact:
ITVMedia Relations:
Brigitte Trafford 0207 620 1620
Jim Godfrey 0207 261 8148 / 07876 396521
Simon Rigby, Citigate Dewe Rogerson 0207 638 9571
Investor Relations:
James Tibbitts 0207 620 1620
Georgina Blackburn 0207 261 3911
Caroline Bailey 0207 261 3909
Friends Reunited
Carolynne Bull-Edwards or Victoria Reed
01883 717468 / 01883 724357/ 07932 723866
ITV is Britain's biggest and most popular commercial broadcaster, with 85% of people in the UK watching ITV in any week. ITV's flagship channel - ITV1 - is the home of the most popular drama and entertainment programmes on British television and ITV2,3 and 4 are among the most popular channels on multi-channel television.
ITV has established ITV Consumer (ITVC) to build businesses which create and monetise direct consumer relationships for ITV. Led by Jeff Henry, it is expanding ITV's family of channels to encompass mobile, broadband and other services. ITV Mobile has established itself as the UK 's leading entertainment mobile portal, available on every mobile platform with streamed content and downloads from hit ITV shows such as I'm A Celebrity. and X Factor, news, entertainment gossip, games, weather, TV listings, phone wallpapers and ringtone downloads.
ITV Local is a broadband TV trial in Brighton and Hastings which includes local news, weather, local films, an entertainment guide, community video and classified advertising. The service is targeted at people living in Brighton and Hastings but is available to anyone online at www.itvlocal.tv. The pilot - run by ITV Meridian MD Lindsay Charlton - allows ITV to expand into the local classified advertising market for the first time, enabling people to buy and sell online under the ITV Local brand. The three month trial will test consumer demand and, if successful, ITV plans to expand the services to other parts of the UK.
To be launched next year, ITV Play is an interactive brand which will feature 'participation TV' quizzes and other play formats across ITV's family of digital channels, on mobile and online.
Founded by North London based husband and wife team Steve and Julie Pankhurst and their business partner Jason Porter, Friends Reunited was launched in July 2000 so that people could get in contact with their old school friends. A combination of word of mouth and immense media attention has propelled the site to phenomenon status, expanding beyond the school friends proposition to include workplaces, teams/clubs and streets.
To help take the company to the next stage in its development, in February 2003 the founders opted to step back and bring in a management team. Headed by Michael Murphy (former COO of Financial Times), Friends Reunited has successfully retained the core ethos at the same time as tripling profits and expanding the family of sites to include the UK's largest genealogy site Genes Reunited, leading match-making service Friends Reunited Dating, Friends Reunited Jobs and social networking site Friends Reunited Connections.