ITV Plc, the UK’s largest commercial free-to-air broadcaster, continues to expand its ITV Studios production business. It is buying 79.5% of the equity in UK non-scripted TV production company Plimsoll Productions in a deal worth £103.5m, valuing the whole company at £131m.
The remaining equity will be owned by the management team but the deal includes put and call provisions for that to be acquired by ITV after five years for a maximum of £80m.
Plimsoll made operating profit of £10m in 2021 and was owned by the PE subsidiary of Lloyds Banking Group. Plimsoll was founded in 2013 and its award-winning productions focus on natural history, including Hostile Planet, Tiny World and Night on Earth. Clients include: Netflix, ITV, Tencent, Disney, Fox Nation and Ard Group. Plimsoll also produces a range of documentary and factual entertainment programming. The deal will complete in July.
The continuing growth of ITV’s production companies and the pessimism about the group’s digital broadcasting strategy underline the view that ITV Studios may be worth as much as the whole listed £2.8bn company. Which should prompt either a long-awaited bid (perhaps by longterm shareholder Liberty Global) or shareholder pressure for a breakup of ITV.
The UK government’s current controversial plan to auction off the state-owned (but self-supporting) Channel 4 may become a catalyst. If ITV sought to acquire Channel 4 (as it has indicated), that might highlight the rationale for breakup. On the other hand, a high-priced auction might anyway appetise long-suffering ITV shareholders: ITV shares have almost halved in the past year.
