France-based Banijay Group has sealed a $2.2 billion deal for Endemol Shine, in a move that will create a new pecking order in the international TV business.
The merged entity will be the largest non-U.S. player in the market, with a bigger catalogue than the main U.K. players, BBC Studios and ITV Studios. Banijay is owned by company chairman Stephane Courbit’s LOV Group and an arm of the Italian conglomerate De Agostini, and Vivendi.
The acquisition needs anti-trust approval. Banijay is understood to be confident the deal will get past regulators. The deal will be financed through a capital increase at Banijay Group and debt financing, including a full refinancing of Banijay and Endemol Shine’s existing debt, supported by Deutsche Bank, Natixis and Société Générale. Banijay’s and Endemol Shine’s respective debt was approximately $486 million and $1.83 billion as of December 2018.
The combined group will be held by LDH (67.1%) ,which comprises Financière LOV, De Agostini and Fimalac, the investment company of Marc Ladreit de Lacharrière, and French media giant Vivendi (32.9%).
Together, Banijay and Endemol Shine have interests in more than 100 production companies, including Kudos, Charlie Brooker’s House of Tomorrow, and Wiedeman and Berg Television on the Endemol Shine side. The likes of Bunim/Murray, RDF and Yellow Bird are in the Banijay stable. In its release announcing the deal, Banijay said the “total pro-forma revenue of the combined group is expected to be approximately €3 billion [$3.3 billion] for the year ending December 31st, 2019.”
“Endemol Shine brings an incredible array of industry-leading talent, globally renowned brands and high-quality creative content. Combining the resources of these two companies will instantly strengthen our position in the global market, and our capabilities across genres will further define us as a go-to provider of first class IP worldwide,” said Marco Bassetti, CEO of Banijay.
“Welcoming the Endemol Shine brands and talents to our existing business will signal enhanced opportunities in the marketplace, and we are all excited by what the future holds for the combined entity,” Bassetti said.
Sophie Turner Laing, the CEO of Endemol Shine Group, said: “This deal takes us into a whole new and exciting chapter and into a new enhanced global content house with many opportunities ahead.
“At Endemol Shine, we have continually inspired and entertained audiences around the world, a testament to every single person across the Group,” Turner Laing said.
Banijay chairman Courbit previously worked at Endemol (before its merger with Shine), as did CEO Marco Bassetti, and the company has long courted Endemol Shine. Numerous other big hitters took a look at the Disney- and Apollo-owned producer and distributor, but they either declined to put forward a bid or dropped out of the running, put off by Endemol Shine’s original reported asking price of $4 billion and its hefty debt load. Banijay ultimately closed a deal after an 18-month-long sale process.
Endemol Shine has a head count of more than 4,000. For staff who survived the post-merger cull when Endemol and Shine merged in 2014, it’s Groundhog Day. Sales and back office functions are expected to be the area of greatest overlap in the new Banijay-Endemol Shine entity and the most obvious targets for cost cuts. Cathy Payne, boss of distribution business Endemol Shine Intl., said she was leaving shortly before the Banijay deal was announced.
Banijay posted revenues of €826.6 million ($917.5 million) for the year to end-2018 and an operating profit of €72.8 million ($80.8 million). Endemol Shine posted revenues in the region of €1.8 billion to €1.9 billion ($2 billion to $2.1 billion) in recent years.
The combined Banijay and Endemol Shine catalogue approaches 90,000 hours of content, bigger than that of the BBC’s sales arm. Key Banijay titles include dramas “Versailles” and “The Inbetweeners,” and, in unscripted, “Wife Swap.” Endemol has “Big Brother” and MasterChef” among its big-ticket unscripted titles, and “Black Mirror” and “Peaky Blinders” on the drama side.