The former chief executive of Five, David Elstein, has bought the Hallmark Channel’s international TV operations for an estimated £167 million.
The purchase was backed by private equity group, 3i, and Providence Equity Partners, who reportedly put in half the money to buy the unit from Crown Media Holdings.
Commenting on the deal, Crevan O’Grady, 3i director said: “3i has known David for some time and we are delighted to be working with him again in acquiring Crown Media’s international businesses. Media remains a key area of investment for 3i and we have been keen to expand our portfolio into broadcast for some time. 3i’s international network is a good match for the scope and ambition David and the team have for the business and we look forward to supporting and encouraging management to further develop the company”
Elstein will now retain control of Hallmark Channel UK, as well as Hallmark operations in over 120 countries worldwide. He will also own the rights to 580 films in the channel’s library, including ‘Moby Dick’ and ‘Gulliver’s Travels’.
Hallmark’s US channel has expanded recently and can now be seen by approximately 68 million viewers, with the international channel reaching about 60 million people in 152 countries. The UK channel is among the 10 most watched multi-channel TV stations in Britain and, according to industry sources, is the only profitable operation in Hallmark’s portfolio.
Elstein will take on the role of chairman and is said to be appointing a five-strong management team to support in due course.
Crown Media has been looking to find a buyer for its non-US TV channels since last year, with other contenders for the business being BSkyB, Time Warner and Sony Pictures Television International.
Proceeds from the transaction will be used by Crown to reduce outstanding indebtedness under its bank credit facility, for the repayment of certain intercompany receivables and payment of other liabilities.
David Evans, president and chief executive officer of Crown Media said: “We are very pleased to have signed this agreement. We are confident that the investor group will capitalize on its global media expertise to continue to expand this international business, while we focus our efforts on maintaining the tremendous growth in ratings and distribution we have been able to generate in our domestic business.”
He added: “From a financial perspective, this is an excellent opportunity for our company to reduce leverage and improve our overall capital structure.”
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