One Equity Partners has agreed to buy the TV Guide Network from Macrovision (Nasdaq: MVSN). The deal is valued at $255 million, plus the possibility of another $45 million in earn-out payments through 2012. It is expected to close by April 1, 2009. One Equity is partnering on the deal with Allen Shapiro, former president of Mosaic Media Group and ex-CEO of Dick Clark Productions. UBS Investment Bank ran the process for Macrovision.
Macrovision Solutions Corporation (NASDAQ: MVSN), a digital entertainment technology leader, today announced it has reached an agreement to sell its TV Guide Network property to Allen Shapiro and One Equity Partners for approximately $255 million in consideration, subject to a working capital adjustment at closing, plus up to an additional $45 million payable through earn-out provisions through 2012. The transaction, expected to close no later than April 1, 2009, includes the TV Guide Online (tvguide.com) business, certain indemnifications and is subject to customary closing conditions.
TV Guide Network is the 19th most distributed network and available in 83 million homes. TV Guide.com is one of the fastest-growing online entertainment destinations with over 15 million monthly unique visitors.
“Today’s announcement further demonstrates our ability to execute against our business plan. We remain committed to delivering leading interactive program guide technology, data solutions and video search capability as key ingredients to the future of the digital home. This divestiture will further streamline our business operations and once again demonstrates our ability to execute on Macrovision’s vision of providing consumers with a uniquely simple home entertainment experience,” said Fred Amoroso, President and CEO of Macrovision. “Furthermore, we continue to make progress towards our goal of divesting TVG Network, our horse racing wagering channel, which we expect to sign in early 2009.”
“I believe the TV Guide Network and tvguide.com are unique properties in the media landscape,” said Allen Shapiro. “These assets and brands are extremely difficult to replicate and create significant opportunities for sustained growth. We are very enthusiastic about working with One Equity Partners to execute on our vision.”
“We are excited to partner with Allen Shapiro on this transaction,” said Greg O’Hara, a Managing Director of One Equity Partners. “With Allen’s expertise and impressive track record with media investments, we believe this acquisition will serve as a platform for other acquisitions across the entertainment and digital landscape.”
Ryan O’Hara, President of TV Guide Network added: “Over the last few years, the TV Guide Network team has made great strides in transforming the property into a fully distributed entertainment focused network that will continue to develop and prosper. This transaction is really a win for all constituents.”
The structure of the deal also allows Macrovision to utilize the strategic capabilities of TV Guide Online while remaining focused on Macrovision’s core competencies in technology. Specifically, Macrovision retains the key strategic on-line elements currently utilized through this site, namely its B2B grid syndications business, whereby the company licenses its online guide to other portals, and functionality that enhances its embedded guidance product offering, such as integration from embedded guides with online or mobile guides that allow for remote record.
More than 82 million TV households currently enjoy Macrovision licensed interactive programming guides (IPGs) which provides the TV viewer program listings information, making it the primary tool for managing the TV experience. Macrovision’s solution portfolio, which includes industry-leading IPGs and program metadata, associated patent portfolio, music and video metadata, media recognition, as well as networking and security technologies, position the company firmly at the center of the shift to digital entertainment. Macrovision continues to invest in and develop new guide technologies that ultimately enhance the consumers total entertainment experience, including new offerings for CE device makers, system operators, service providers and content providers of virtually all forms of entertainment.
Macrovision’s previously disclosed financial estimates for 2008 and 2009 included the results of the TV Guide Online business. As the TV Guide Online business is included in the sale of the TV Guide Network, the results of the TV Guide Online business will now be included in discontinued operations for all historical financial periods. Further, the overall proceeds for businesses being sold will be lower than previously expected. When considering the strength in Macrovision’s core technology solutions and elimination of the TV Guide Online business from continuing operations, 2008 adjusted pro forma revenue is now expected to range between $420 million and $430 million. After removing the TV Guide Online business from the estimates and adjusting for lower than expected sale proceeds, Macrovision’s 2009 revenue is now expected to range between $435 million and $475 million and adjusted pro forma earnings per share is expected to range between $1.15 and $1.45. Proceeds from all divestitures will be used to retire debt.
UBS Investment Bank served as financial advisor to Macrovision on this transaction.
About Macrovision Solutions Corporation
Macrovision Solutions Corporation is focused on providing a uniquely simple digital home entertainment experience by delivering solutions to businesses to protect, enhance and distribute digital goods to consumers across multiple channels. Macrovision’s technologies are deployed by companies in the entertainment, consumer electronics, cable and satellite, and online distribution markets to solve industry-specific challenges and bring greater value and a more robust user experience to their customers. The result of deploying Macrovision’s solutions is a simple end user experience for discovering, managing and enjoying digital content. Today, Macrovision provides connected middleware, media recognition, interactive programming guides, copy protection and rich media, data and metadata on music, games, movies and television programming. The company also operates an entertainment portal which can be found at http://www.allmusic.com/. Macrovision holds over 4,100 issued or pending patents and patent applications worldwide.
Macrovision is headquartered in Santa Clara, California, with numerous offices across the United States and around the world including Japan, Hong Kong, Luxembourg, and the United Kingdom. More information about Macrovision can be found at http://www.macrovision.com/.
About Allen Shapiro
Allen Shapiro was most recently President of Mosaic Media Group and CEO of dick clark productions. As President, Mr. Shapiro expanded Mosaic from an entertainment service business into an asset management company by investing in and controlling strategic media assets. Mr. Shapiro facilitated the leveraged buyout of dick clark productions (dcp) and became CEO of dcp in 2004. While at dcp, Shapiro served as Executive Producer of “So You Think You Can Dance,” The Golden Globes, American Music Awards, Academy of Country Music Awards, and New Years Rockin’ Eve. dcp was successfully sold in June 2007. Mr. Shapiro arranged Mosaic’s acquisition of Hamstein Music (ZZ Top) and the Daksel & Seldak (Aerosmith) catalog to form Mosaic Music Publishing. Mosaic Music Publishing was sold successfully in 2005. Prior to joining Mosaic, Shapiro served as President / CEO of The IndieProd Company, where he arranged the sale of the Company to Carolco Pictures Inc. While at IndieProd, Shapiro also produced numerous films and television shows. In 1983, Shapiro joined, and subsequently became a partner at the law firm Gipson Hoffman & Pancione. Shapiro also headed the music
practice of the prestigious Kaplan, Livingston, Goodwin, Berkowitz and Selvin firm and specialized in music and entertainment law in private practice. Shapiro’s professional career began in his hometown of Chicago, IL in the Office of the General Counsel at Playboy Enterprises, Inc.
About One Equity Partners
Established in 2001, One Equity Partners manages $8 billion of investments and commitments for J.P. Morgan Chase & Co. in direct private equity transactions. Over recent years, One Equity Partners has invested approximately $3.5 billion to acquire over thirty companies in a variety of industries including defense, chemicals, healthcare, technology and manufacturing. One Equity Partners’ investment professionals are located across North America, Europe and Asia, with offices in New York, Chicago, Menlo Park, Frankfurt and Hong Kong. Visit http://www.oneequity.com/ for more information.