Company to hit acquisitions trail
LONDON — Italo conglom De Agostini has unified its sprawling European production empire into a single entertainment powerhouse, Zodiak Entertainment, with the aim of consolidating its position in Europe and advancing into North America and Asia.
De Agostini and Zodiak CEO Lorenzo Pellicioli unveiled the new entity Wednesday in London, flanked by his executive team, drawn from the ranks of its leading brands, Sweden’s Zodiak, France’s Marathon and Italy’s Magnolia.
The combined revenue of the group, whose footprint covers 20 territories, is forecast to be Euros 400 million ($516 million) this year.
Zodiak, which will have its head offices in Paris and London, will be on the look out to acquire further production companies, particularly in key markets such as the U.S. and the U.K., and emerging markets such as India and Turkey.
“In this business, the U.S. is very important,” Pellicioli said. “If you’re on air there, it’s easier to sell your product elsewhere. It is very difficult to become a leading international brand without a presence in the U.S.”
Pellicioli said the company would raise up to $258 million to pay for organic growth and acquisitions. In the next three years, Zodiak aims to double its revenue to between $1.03 billion to $1.3 billion, and float on the stock market.
Its principal acquisition targets would be those companies with sizeable libraries, established inhouse showrunners and talent, and strong relationships with broadcasters, Pellicioli said. He ruled out the acquisition of distributors and broadcasters.
The Zodiak execs said that although the credit crunch and economic downturn posed challenges, it also opened doors. “It is the end of the golden years and it is also a great opportunity for us,” Pellicioli said.
Giorgio Gori, senior VP, light entertainment, said the company was better placed to prosper in the tough economic climate than other TV companies. “People (in the television industry) have been so lazy that they have not had to adapt, but we have,” he said.
The company would ramp up co-productions and push into new territories to benefit from economies of scale. “One way to cut budgets is to become more international. More co-productions and libraries will be the key,” said Pascal Breton, senior VP, fiction.
Acquisitions also will include new media companies, one of the benefits of which would be to absorb execs and talent with new media expertise. “It is a business based on people and the people in digital are different from those of us who started in television,” Gori said.
Although the group is to integrate its different sales operations, there would be no job losses, said Pellicioli. Quite the contrary, he added, the group would be adding to its payroll.
The group’s present programming runs the full gamut of genres, including animation, reality, factual, drama and entertainment, with 57% of its revenue coming from unscripted fare, 33% from scripted programming and 10% from distribution.
Its productions include toons “Totally Spies!” and “Gormiti,” dramas “Wallander” and “Millennium,” factual series “Born Survivor: Bear Grylls” and entertainment show “Beat the Star.”