3i and Providence double money on TV company(3)

US TV channel NBC Universal has bought television company Sparrowhawk Media, owner of the Hallmark Channel, for about £175 million. Buyout firms 3i and Providence Equity Partners have spent the last two years turning the business around.

Buyout firms 3i and Providence Equity Partners, in conjunction with UK businessman David Elstein, have sold television company Sparrowhawk Media to General Electric-owned NBC Universal.

Terms were undisclosed, but a source close to the company put the sale price at £175 million ($352 million, €258 million).  

Sparrowhawk provides pay-television and has an extensive library, with activities in Asia, eastern Europe, the UK and elsewhere.

The source said: “The buyout firms doubled their money. The business was originally loss-making but they left it in profit.” Sparrowhawk set up distribution agreements with cable companies Sky and Virgin Media, increasing revenues, she said.

In a statement, NBC said it was interested in the company’s exposure to eastern Europe and Asia.

The company’s main asset is pay-TV channel Hallmark, which shows the popular programmes Law & Order, House and Monk. The channel has an audience of 60 million people internationally. It also recently launched Movies 24 in the UK.

The buyout consortium paid $242 million two years ago to buy a portfolio of Hallmark-branded channels from Crown Media. The two firms chose not to buy the rights to the US channel but instead acquired all the company’s international channels, re-branding them as Sparrowhawk.

Other buyout firms have also made significant forays into the television business. In April, Goldman Sachs Capital Partners and ex-Italian premier Silvio Berlusconi bought Big Brother producer Endemol for €2.6 billion ($3.5 million), alongside its founder John De Mol. Last year Bridgepoint sold All3Media to Permira, generating a 5.5 times multiple on its original 2003 investment.