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As a result all employees of the international business as well
as the broadcast facility will be employed by the investor group.
Proceeds from the transaction will be used by Crown Media to reduce
outstanding indebtedness under its bank credit facility, for the
repayment of certain intercompany receivables and the payment of
other liabilities.
It was only a matter of time before Crown Media took this decision.
In 2003 Crown Media's international operations lost $21 million
on about $83 million of revenue. The warning signs that Hallmark
was not doing well in Asia came in 2002. That year the company closed
down its Singapore sales office. It had also reduced the number
feeds for the Asia Pacific region from seven to just two.
Dwelling on the transaction Crown Media president and CEO David
Evans said, "We are very pleased to have signed this agreement.
We are confident that the investor group will capitalise on its
global media expertise to continue to expand this international
business, while we focus our efforts on maintaining the tremendous
growth in ratings and distribution we have been able to generate
in our domestic business. From a financial perspective, this is
an excellent opportunity for our company to reduce leverage and
improve our overall capital structure."
The transaction is subject to customary closing conditions, including
approval by the applicable regulatory authorities. The company expects
to obtain approval and complete the transaction within six weeks.
Providence Equity Partners is a private investment firm. It specialises
in equity investments in communications and media companies around
the world. The principals of Providence Equity manage funds with
over $9.0 billion in equity commitments.
Elstein is a former Channel 5 CEO. He now serves as the chairman
of the British Screen Advisory Council, the Commercial Radio Companies
Association, Really Useful Theatres Limited, Screen Digest Limited,
Sports Network and Digital Classics.
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Crown Media in discussions
to sell Hallmark
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