Select Committee on Treasury Written Evidence


Memorandum submitted by ALL3MEDIA

EXECUTIVE SUMMARY

    —  ALL3MEDIA welcomes the opportunity to submit evidence to the Treasury Select Committee inquiry into private equity.

    —  One of the UK's largest independent TV production groups, ALL3MEDIA was founded in 2003 when an experienced management team came together with Bridgepoint Capital (a private equity firm) to acquire Chrysalis TV. Since then the company has expanded rapidly, growing organically and through acquisition. In 2006 Bridgepoint sold its stake in ALL3MEDIA to Permira.

    —  Today the company has a turnover of over £215 million and employs over 1,000 people.

    —  ALL3MEDIA's experience of private equity is extremely positive. The availability of private equity finance was instrumental in the foundation and success of ALL3MEDIA, however, just as important has been the high level of support given by the company's private equity investors.

    —  ALL3MEDIA's positive experience of the private equity model of ownership differs fundamentally from much of the negative rhetoric of recent months; the company's private equity investors have always placed an emphasis on the "long term" value of the business. Without the involvement of private equity ALL3MEDIA would not be the British success story it is today.

INTRODUCTION

  1.  ALL3MEDIA is one of the UK's largest independent TV production groups, owning 10 UK and international TV production companies, covering all major programme genres, with particular strengths in drama, entertainment, factual entertainment and sport.

  2.  ALL3MEDIA has produced of some of the UK's best-known and successful programming including: Hollyoaks (Channel 4); Castaway (BBC); Shameless (Channel 4); Midsomer Murders and Wild at Heart (ITV); and Elizabeth I (Channel 4/HBO).

  3.  ALL3MEDIA was founded in 2003 when an experienced management team came together with Bridgepoint Capital (a private equity firm) to acquire Chrysalis TV—the TV production business owned by Chrysalis plc—in a £45 million deal. In September 2006, after three successful years with Bridgepoint Capital, the Permira Funds acquired Bridgepoint's stake in ALL3MEDIA in a transaction with a total value of £320 million.

  4.  ALL3MEDIA has expanded rapidly, growing organically and through acquisition. At the time of the company's formation ALL3MEDIA had a turnover of approx. £90 million and employed around 330 members of staff. Today the company has a turnover of over £215 million and employs over 1000 people.

  5.  In March 2007 ALL3MEDIA was recognised by the Sunday Times as the UK's best-managed privately-owned firm and as the 4th fastest growing company under private ownership.

ALL3MEDIA'S EXPERIENCE OF PRIVATE EQUITY INVESTMENT

  6.  All3MEDIA's experience of private equity is extremely positive—without private equity investment ALL3MEDIA simply would not exist. The availability of private equity finance was instrumental in the foundation and success of ALL3MEDIA, the management team could not have raised the necessary level of finance any other way. However, just as important was the level of involvement from Bridgepoint Capital. Bridgepoint worked in a genuine partnership with the ALL3MEDIA management to implement the company's strategy for growth particularly helping to manage a fast moving acquisition process.

  7.  The Bridgepoint team's involvement was crucial during the numerous acquisitions that ALL3MEDIA made in the company's first three years. They had an almost constant presence at the ALL3MEDIA office during the acquisition process and their long experience was crucial as new acquisitions were integrated into the ALL3MEDIA portfolio.

  8.  When Bridgepoint sold its stake to Permira in 2006 it represented the natural conclusion of the first stage of ALL3MEDIA's life. Bridgepoint are specialists in growing small and mid-cap companies. Once ALL3MEDIA had become established as a successful, stable and growing business, it was right for Permira, which specialises in more mature companies, to invest. Permira now takes a more "hands off" approach, which suits the increasing experience of the ALL3MEDIA management team. Permira continues to be extremely supportive of the management team's plan for continuous, sustainable growth. In the first six months of Permira's investment ALL3MEDIA has already made a major acquisition in MME MOVIEMENT, one of Germany's leading independent production companies and will benefit in the future from Permira's international network.

  9.  ALL3MEDIA's positive experience of the private equity model of ownership differs fundamentally from much of the negative rhetoric of recent months. ALL3MEDIA's private equity investors have been ideal partners for growth and investment—the emphasis has always been on enhancing the long term value of the business.

  10.  In early 2003, changes to the regulations concerning ownership rights of content were implemented with the aim of putting the independent production sector onto a more stable commercial footing. Partnership with private equity allowed ALL3MEDIA to be "first off the blocks" in taking advantage of a changed regulatory environment designed to create a thriving and vibrant independent production sector.

  11.  ALL3MEDIA represents a British success story in an increasingly globalised sector. The Government has identified the crucial role the creative industries have in securing the future competitiveness of the UK economy. In making world leading and awarding winning drama, entertainment, factual entertainment and sport, ALL3MEDIA is playing a key role in driving the growth of the UK creative sector; ensuring high quality British programming dominates TV schedules in the UK, and across the world.

May 2007





 
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