Broadcaster ITV has bought the Friends Reunited Web site for £120m ($208m), a deal the UK-based company hopes will help to boost its online presence. Friends Reunited lets you find old friends and read what people you've lost touch with are doing now. It's free to search and browse entries for the people listed.

The Web site has more than 12 million registered users and profits have risen as the firm expanded to offer genealogy and Internet dating services as well. 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.

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 per cent 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 per cent of homes by 2010 and UK Internet advertising spend predicted to rise above £1 billion in 2006, the acquisition will enable ITV to strengthen significantly its current online presence, adding Friends Reunited to ITV.com and ITV Local - a broadband TV trial in Brighton and Hastings .

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 and ITV Local earlier this year, and will launch a new Interactive TV service, ITV Play, in the New Year. The acquisition makes ITV's family of sites the largest UK-owned commercial online business.

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. The Friends Reunited team will also become part of ITV Local's project management team. Jeff Henry, Director of ITV's Consumer Team said: 'This deal combines Britain's most popular commercial broadcaster with some of Britain's biggest web sites and most popular content online. Together they give ITV an unmatched commercial presence in the UK on television and online.

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.'

BIOS, Dec 06, 05 | Print | Send | Comments (0) | Posted In Internet