Despite Friends Reunited refusing to comment on our questions posed to them last month, ITV PLC announced today that it has acquired the community web site from the founders and employees of the Friends Reunited business.
ITV will acquire the holding company of the group for an expected £120 million (USD$208m) 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 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.
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 – a broadband TV trial in Brighton and Hastings.
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 higher.
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. 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 profitable."
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 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.
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