Endemol charts Southern route
Company acquires Australia's leading TV groupFairfax Media on Tuesday confirmed its AUS$75 million ($49.7 million) sale of the Southern Star Group, of one of Australia's leading television production and distribution outfits, to U.K.-based Endemol.
The deal sees Endemol CEO Ynon Kreiz make good on his pledge to grow his company's scripted drama businesses, giving the producer-distributor of "Wipeout" and "Deal or No Deal" full control of Southern Star's 14,000-hour portfolio of drama, kids' entertainment, factual and reality TV formats, including rights to such key international shows as "Home and Away" and "McLeod's Daughters."
Kreiz said the deal, first announced Monday in London, will help private-equity-backed Endemol achieve "key strategic objectives," including establishing itself as a major production force in Australia, New Zealand and the Asia Pacific region, building its global distribution platform and accelerating it scripted programming activities.
In a statement to the Australian Stock Exchange, Fairfax, the country's largest newspaper publisher, said that the sale price also includes additional payments due in three years, dependent on business performance.
Under the deal, Fairfax will retain ownership of Southern Star Factual, the U.K.-based producer of natural history and science programming previously known as Oxford Scientific Films, as well as its 75% stake in U.K. children's and interactive producer Darrall Macqueen.
The Southern Star sale, when combined with the proceeds of the recent sale of Carnival Film and Television to NBC Universal, will net Fairfax Media about AUS $120 million ($79.5 million).
Fairfax, Australia's largest newspaper publisher ,acquired Southern Star, including Carnival, in November 2007 for AUS $150 million ($99.5 million) as part of its buyout of media group Southern Cross Broadcasting.
Fairfax is now carrying debt of about AUS$2.5 billion ($1.7 billion), which its chairman, Ron Walker, said the sale proceeds will help to pay down.
Fairfax had been in talks with various buyers for Southern Star for four months and said in December that it was in discussions with Endemol for a sale with a price tag of about AUS$160 million ($112 million).
Under the pact, distribution arm Southern Star International, production division Southern Star Entertainment and Southern Star's 49% stake in reality and factual producer Endemol Southern Star will fall under the Endemol umbrella.
Key executives, such as Southern Star CEO Hugh Marks, will keep their jobs, reporting to Kreiz. Endemol Southern Star and Southern Star Entertainment will remain under the supervision of Rory Callaghan, who will report to Endemol COO Marco Bassetti.
Southern Star International will continue to be headed by Cathy Payne, who will report to incoming Endemol chief commercial officer Tom Toumazis, who is expected to play a key role in integrating the businesses.
Endemol signed a joint venture with Southern Star in 2000 to produce "Big Brother" for the Australian market. The show was axed by Network Ten in 2008 after eight seasons.
Southern Star is the last major independent producer in Australia to be acquired by a foreign production group.
Pip Bulbeck reported from Sydney. Mimi Turner reported from London.