Liberty Global, Discovery To Acquire All3Media For Enterprise Value Of $930 Mln

(RTTNews) - Discovery Communications (DISCA) and Liberty Global (LBTYA) Thursday announced an agreement to form an equal joint venture to acquire All3Media, an international producer and distributor of award-winning TV programming, from its founders and the Permira funds. Discovery and Liberty's joint venture will acquire All3Media at an enterprise value of about $930 million (550 million pounds).

"We're excited to be partnering with Discovery on this transaction. In view of the increased competition for great content and non-linear rights, All3Media represents a smart strategic investment for us over the long-term," said Mike Fries, CEO of Liberty Global.

"Just as importantly, we expect All3Media to provide very attractive financial returns given its growth potential and our proposed financing structure." The acquisition will be funded through a combination of equity and new non-recourse credit facilities raised at All3Media, resulting in both companies contributing about $150 million (90 million pounds) in cash.

Under the equal joint venture structure, Discovery and Liberty will not consolidate All3Media in their financial statements. The deal is expected to close in the third quarter.

All3Media, the largest independent production group in the U.K. with headquarters in London, has a strong presence in the U.S., Germany, the Netherlands and New Zealand, and has 26 creative centers in the world's largest TV producing markets.

All3Media has a diversified catalogue of more than 8,000 hours of content across numerous genres, with strong production capabilities in drama, comedy, factual and factual entertainment programming. For the fiscal year ended August 2013, All3Media recorded revenues of about 505 million pounds.

Discovery Communications and Liberty Global will preserve All3Media's creative independence and focus on serving its global broadcasting partners. The All3Media group will continue to operate under its own name with its own executive management team, and its existing creative operating model as a standalone, independently managed entity.

J.P. Morgan acted as financial adviser to Discovery and Liberty and Freshfields Bruckhaus Deringer LLP served as legal adviser.

Liberty Global stock is trading at $43.05, up $0.35 or 0.82%, on a volume of 2.5 million shares on the Nasdaq.

Discovery Communications stock is trading at $74.48, up $1.76 or 2.42%, on a volume of 1 million shares.