NBC Uni aims for Sparrowhawk
Would acquire Hallmark int'l ops for $350 milEDINBURGH, Scotland -- NBC Universal is poised to announce a $350 million deal to acquire Sparrowhawk Media, the U.K.-based private-equity vehicle that owns the international operations of the Hallmark Channel, sources said Sunday. A deal is not yet concluded but will likely be finalized "within days rather than weeks," according to one person familiar with the deal.
The deal would prove critical to NBC Universal's expansion plans under CEO Jeff Zucker, who has made overseas revenue growth one of his main priorities.
Neither Sparrowhawk nor NBC Universal would comment on the prospect of the deal, but sources close to the talks confirmed that discussions are at an advanced stage.
Sparrowhawk paid $242 million for the business in April 2005, backed by Providence Equity Partners and 3i, under the chairmanship of former Channel Five CEO David Elstein, who hired former Walt Disney International Television head David Hulbert to be chief executive of the business. It has since broadened the channel base by adding new brands, including made-for-television movie service Movies24 and joint venture KidsCo to its channel portfolio.
KidsCo, a three-way partnership with DIC Entertainment and Nelvana, launches in Poland, Hungary, Romania, Turkey and the Ukraine on Sept. 7. It will be the first kids' channel within NBC Universal's international television portfolio, which is headed by president Pete Smith.
NBC Universal currently counts male-skewing international channel brands including CNBC, Sci Fi and crime net 13th Street within its portfolio. These would complement the female-oriented international Hallmark Channel brand and Movies 24, which launched on the Sky platform in the U.K. earlier this year.
Private-equity operators Providence and 3i are understood to have been looking for a buyer for the Sparrowhawk business since the end of last year and have looked at the option of selling off parts of the business separately as well as in one single deal. The operations combine the international channels business, a programming library and a transmission business. But the recent collapse in confidence of the credit markets has made a trade partner more likely than another private-equity buyer.
"In the current climate, it is easier for a trade player to step in," said another source close to the talks, who cited strong balance sheets and cash flow as the reason corporations would be more able to close a deal. Other bidders thought to have expressed interest include Time Warner, Liberty and News Corp.