Shed Media
Ingenious Corporate Finance advised the management team of Shed Media on their £120m buyout of the company in October 2010. The buyout was achieved through a partnership with Warner Bros., which backed WB BidCo, a new entity formed for the purpose of acquiring Shed. ICF also advised WB BidCo on the technical aspects of the acquisition.
Shed Media is a leading independent TV production company, built up through acquisition and with a strong presence across scripted and non-scripted shows. Following a successful IPO in 2005, and despite consistent financial performance, Shed’s share price began to decline (50% below peak by 2008). Management elected to take the business off the market to: achieve partial liquidity, better incentivise key staff and reignite its acquisition strategy.
ICF advised management on:
- Selection of a partner – ICF and management considered a range of partners across private equity and trade
- Preparation of a business plan ‘selling case’ for going private
- Innovative structuring – WB effectively acted as a PE house, co-owning the business until 2013 when it is committed to buy the remainder at a 10x multiple (significant uplift vs. c. 8x purchase multiple)
ICF advised WB BidCo on the technical execution of the deal:
- Negotiations with Rule 3 adviser and the Takeover Panel
- Technical structuring – management and key staff were able to roll proceeds into BidCo without being ‘offside’ for shareholder vote
- Documentation – the offer was executed by scheme of arrangement and consisted of both an all-cash offer and mixed cash and WB BidCo securities offer available to all shareholders
The deal delivered value for existing shareholders and secured powerful performance incentives for a new generation of management. Following the MBO, Shed benefits both from being part of the global Warner Bros. organisation and from retaining the operational independence which has been core to its identity and success since its foundation.
