06 December 2005
ITV plc acquires Friends Reunited Ltd
ITV's family of sites becomes largest UK-owned commercial online business
ITV plc ('ITV') announced today that it has acquired community web site Friends
Reunited Ltd ('Friends Reunited') from the founders and employees of the Friends
Reunited business. ITV will acquire the holding company of the group for an
expected initial consideration of up to £120 million to be satisfied by a
mixture of cash from ITV's existing facilities and the issue of notes and ITV
shares. A further payment of up to £55 million may be made during 2009 based on
EBITDA performance targets.
The acquisition is part of a strategy to build content based businesses which
create and monetise direct consumer revenue for ITV. ITV's Consumer team has
already successfully launched ITV Mobile (www.itv.com/mobile) and ITV Local, a
broadband TV trial (www.itvlocal.tv), earlier this year, and will launch a new
interactive TV service, ITV Play, in the New Year.
Friends Reunited is forecast to make £12.4 million of revenue and £6.6 million
EBITDA for the year end 2005 and £18.7 million revenue and £8.9 million EBITDA
for 2006. The acquisition is earnings enhancing within the first 12 months and
represents a multiple of 13.5x, based on 2006 EBITDA.
Friends Reunited is the leading reunion web site in the UK and Australia, with
15 million registered UK members across their sites - representing 50% of the
adult online UK population - and more than 1 million paying subscribers.
The business currently comprises of five segments driven by subscriber generated
content and the Friends Reunited database: Friends Reunited - a schools alumni
site; Genes Reunited - a genealogy site; Friends Reunited Dating; Friends
Reunited Jobs and Connections - a social networking site.
With UK broadband penetration set to reach 50% of homes by 2010 and UK internet
advertising spend predicted to rise above £1 billion in 2006, the acquisition
enables ITV to strengthen significantly its current online presence, adding
Friends Reunited to ITV.com and ITV Local.
The acquisition makes ITV's family of sites the largest UK-owned commercial
online business and will deliver key immediate benefits, including:
• ITV.com and Friends Reunited becoming the UK's eighth largest online
presence in terms of unique users, with only search and access portals such as
Google, MSN, Yahoo!, Ebay, and licence-fee funded portal BBC Online ranking
• A powerful consolidated online advertising sales proposition. 53% of
Friends Reunited users are in the ABC1 demographic and 40% are in the 16-34 age
range - both key audiences for advertisers. It will contribute additional
advertising synergies as ITV internet sales will have increased scale, becoming
a one-stop-shop for media agencies in the online space.
• Online cross promotion, links, brand extension and support between
ITV.com, ITV Local and Friends Reunited.
• The development of new services and revenue streams by linking ITV.com,
ITV Local and Friends Reunited in areas such as dating, recruitment and
• A key role for the Friends Reunited management team in developing ITV's
online and broadband strategy.
• The integration of underlying technology and skills such as database
handling across the whole of ITV Consumer (ITV Mobile, ITV.com, ITV Local and
ITV Play), online marketing, and video and mobile handling.
• The development of ITV/Friends Reunited online 'passport' to enable
simple, integrated billing and subscription services for users across ITV and
Friends Reunited sites.
Friends Reunited will be maintained and developed as a separate web presence.
However, ITV will integrate the Friends Reunited, ITV.com and ITV Local
management teams, bringing unrivalled online expertise, product development and
database management skills into ITV. The Friends Reunited team will also become
part of ITV Local's project management team.
Jeff Henry, Director of ITV Consumer said:
'This deal combines Britain's most popular commercial broadcaster with some of
Britain's biggest websites and most popular content online. Together they give
ITV an unmatched commercial presence in the UK on television and online.
'The acquisition of Friends Reunited is also a key step in the delivery of our
strategy to drive new revenue streams for the company. I am confident that
Friends Reunited's unique sites and comprehensive subscription base, combined
with ITV's services and vast range of content will prove both compelling and
Michael Murphy, CEO of Friends Reunited, said:
'Our priority has always been to make Friends Reunited bigger and better as the
more people there are on the site the more friends our members will be able to
reunite with, the more family they will be able to discover and the more chances
of finding a soul mate or even a new job.
'When ITV approached us we immediately clicked; they share our values, they're a
national institution that is trusted and well loved, and by joining with them,
Friends Reunited gets access to a vast audience so we can connect even more
people even more of the time.'
Steve Pankhurst, co-founder of Friends Reunited, said:
'When we started Friends Reunited in our spare bedroom in July 2000 we had no
idea that what began as a hobby would gain phenomenon status, let alone develop
into a family of successful websites. However, as the business is now run by
Michael and the management team we brought in three years ago and the business
is all grown up, its time for my wife Julie and I to let go knowing it's in safe
For further information please contact:
Brigitte Trafford 0207 620 1620
Jim Godfrey 0207 261 8148
Simon Rigby, Citigate Dewe Rogerson 0207 638 9571
James Tibbitts 0207 620 1620
Georgina Blackburn 0207 261 3911
Caroline Bailey 0207 261 3909
Carolynne Bull-Edwards or Elizabeth Sheahan
01883 717468 / 01883 724357/ 07932 723866
or email firstname.lastname@example.org
Notes to Editors
ITV is Britain's biggest and most popular commercial broadcaster, with 85% of
people in the UK watching ITV in any week. ITV's flagship channel - ITV1 - is
the home of the most popular drama and entertainment programmes on British
television and ITV2,3 and 4 are among the most popular channels on multi-channel
ITV has established ITV Consumer (ITVC) to build businesses which create and
monetise direct consumer relationships for ITV. Led by Jeff Henry, it is
expanding ITV's family of channels to encompass mobile, broadband and other
services. ITV Mobile has established itself as the UK's leading entertainment
mobile portal, available on every mobile platform with streamed content and
downloads from hit ITV shows such as I'm A Celebrity... and X Factor, news,
entertainment gossip, games, weather, TV listings, phone wallpapers and ringtone
ITV Local is a broadband TV trial in Brighton and Hastings which includes local
news, weather, local films, an entertainment guide, community video and
classified advertising. The service is targeted at people living in Brighton and
Hastings but is available to anyone online at www.itvlocal.tv. The pilot - run
by ITV Meridian MD Lindsay Charlton - allows ITV to expand into the local
classified advertising market for the first time, enabling people to buy and
sell online under the ITV Local brand. The three month trial will test consumer
demand and, if successful, ITV plans to expand the services to other parts of
To be launched next year, ITV Play is an interactive brand which will feature '
participation TV' quizzes and other play formats across ITV's family of digital
channels, on mobile and online.
About Friends Reunited
Founded by North London-based husband and wife team Steve and Julie Pankhurst
and their business partner Jason Porter, Friends Reunited was launched in July
2000 so that people could get in contact with their old school friends. A
combination of word of mouth and immense media attention has propelled the site
to phenomenon status, expanding beyond the school friends proposition to include
workplaces, teams/clubs and streets.
To help take the company to the next stage in its development, in February 2003
the founders opted to step back and bring in a management team. Headed by
Michael Murphy (former COO of Financial Times), Friends Reunited has
successfully retained the core ethos at the same time as tripling profits and
expanding the family of sites to include the UK's largest genealogy site Genes
Reunited, leading match-making service Friends Reunited Dating, Friends Reunited
Jobs and social networking site Friends Reunited Connections.
This information is provided by RNS
The company news service from the London Stock Exchange