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On a Tiger hunt

TWI leading the charge as U.S. firms plan invasion of lucrative U.K. indie producers

LONDON — Things just keep getting better for the U.K.’s select group of ambitious independent television producers — so good that U.S. money is poised to claim a piece of the action.

In the next few days sports specialist TWI, owned by New York-based investment house Forstmann Little, is expected to ink a deal to buy British boutique indie Darlow Smithson, famed for its classy documentaries and surprise cult theatrical hit, “Touching the Void.”

The price is expected to be in the region of £25 million to £35 million ($42.5 million to $59.5 million) for one of Blighty’s medium-sized producers with revenues last year of $17 million.

Acquiring Darlow Smithson will be a prelude to hooking far bigger fish.

TWI is eyeing up Tiger Aspect, one of the U.K.’s more successful makers of comedy and drama shows, whose hits include cult comedy “The Catherine Tate Show,” reality skein “Make Me a Supermodel” and kids’ toon “Charlie and Lola.”

It’s Blighty’s tenth biggest TV production company with revenues of $75.17 million in 2003.

If both deals go through TWI will emerge as the U.K.’s biggest indie, with revenues of around $282 million.

TWI, which makes around 2,000 hours of sports programming for U.K. broadcasters, is, in common with other ambitious British companies, keen to move into other genres and take advantage of the favorable trading conditions that now enable producers to claim their share of back-end profits.

This is the latest in a wave of consolidation– and highlights a greater willingness for U.K. independents to find markets outside their home turf.

“Around 75% of Darlow Smithson’s business is generated overseas, most of it in the U.S.,” says a TWI insider. “We’ve made no secret of wanting to expand. Acquiring successful companies makes a lot more sense than starting out from scratch in comedy or drama, always a tricky business.”

A recent survey by Blighty’s Broadcast magazine reckoned that the combined value of the U.K.’s top 150 indies had surged by more than $340 million in the past year from $2.55 billion to $2.95 billion.

Typical of the new breed of confident, fast-growing firms is RDF Media, arguably best known for “Wife Swap.”

Last year the outfit made a successful stock market debut on London’s Alternative Investment Market.

With offices in London, New York and Los Angeles, RDF has recently been buying up executive talent in London following its takeovers of Touchpaper and IWC.

In the last six months RDF has persuaded ex-BBC3 topper Stuart Murphy and ITV program supremo Nigel Pickard to leave the relative security of the U.K.’s two biggest broadcasters and risk a new life as independent producers.

This month ex-Disney and BBC children’s chief Elaine Sperber became the latest high-profile signing to RDF, where she will help build a children’s drama slate.

According to RDF creative head Stephen Lambert more big name appointments are on the cards in Blighty and the U.S., where RDF’s L.A. outpost is hiring two senior production execs.

“There are a lot of opportunities still ahead,” muses Lambert, between pitching sessions. “We’ve come to the conclusion that it is better to employ Americans when working in America,” he adds referring to developments at RDF’s L.A. headquarters.

RDF may be Blighty’s seventh biggest indie ($108 million revenues), but globally the outfit is pint-sized — or as Lambert puts it: “We’ve grown from being a gnat to being a fly, whereas real companies are the size of a horse or cow.”

Even so, he gamely predicts that RDF can emerge as a real player in the entertainment jungle.

“We’re pushing for critical mass,” he says. “There are various ways of achieving that. Do we grow mainly in Britain, or do we try acquiring companies in America or elsewhere in Europe?

“The fact that we are now a listed company is a huge advantage when it comes to acquisitions.”

He predicts: “I think you will see more U.S. money being invested in British indies because we offer a big advantage for American broadcasters because our system, due to the way it is regulated, allows us to take greater creative risks.

“And when we’re pitching to a U.S. channel we can show them a finished tape of a delivered show, rather than just a piece of paper, and sometimes we can show them ratings, too, to prove the show is big in the U.K.”

No wonder TWI is keen to get in on the act.