by Mike Butcher on January 20, 2011
BREAKING: Amazon will acquire the remaining shares in the pan-European movie rental and streaming service LoveFilm. Terms have not been disclosed but we believe the valuation was around $312 million. Amazon already owned 42 percent of LoveFilm which acquired Amazon’s DVD rental business in 2008.Amazon has had a large minority shareholding in LoveFilm for some time and this deal has been in the offing for what seems like forever. The talks have been going on since at least September last year, and Lovefilm investors has been looking for an exit since, oh, 2009?
Assuming regulatory approvals are all fine the deal should close in the first quarter of 2011.
In the US, Amazon has a video-on-demand service but now it gets Lovefilm’s presences in the European online video streaming and rental markets of the UK, Germany, Sweden, Norway and Denmark. LoveFilm recently expanded to stream into Sony Playstation 3 and Sony and Samsung TVs, Blu-Ray players and other home theatre devices.
Will it be rebranded? Hard to say but not right now we hazard.
LoveFilm has had a long history of M&A – over 10 mergers and the acquisition of several other on-line DVD rental companies along the way.
In May 2002, Paul Gardner and Graham Bosher launched DVDsOnTap (Online Rentals Limited) operating out of Harlow, Essex. A year later William Reeve and Alex Chesterman launched Screenselect in London, and in the same month Saul Klein launched Video Island, also in London.
In 2003 DVDsOnTap was invested in by Arts Alliance Ventures, a family-owned private equity firm, rebranded to LoveFilm. Mark Livingstone came in as CEO and then merged the business in 2004 with Video Island.ScreenSelect and LoveFilm were big rivals, acquiring smaller outfits along the way until April 2006 when the two merged under Simon Calver.
In February 2008, LoveFilm acquired Amazon’s DVD rental business in the UK and German markets, and in return Amazon became the largest shareholder of LoveFilm.
Here’s the official release:
-Amazon to Acquire LOVEFiLM International LimitedLUXEMBOURG CITY and LONDON, January 20, 2011 — Amazon.com, Inc. (NASDAQ: AMZN) today announced that it has reached an agreement to acquire the remaining shares in LOVEFiLM International Limited (http://www.LOVEFiLM.com). LOVEFiLM is a leading European subscription entertainment service which combines the benefits of online DVD and games rental-by-post as well as streaming films and TV shows instantly over the internet to PCs, internet enabled TVs and Playstation(R)3. LOVEFiLM operates today in the UK, Germany, Sweden, Norway and Denmark. Amazon already has a significant minority shareholding in LOVEFiLM and does not itself operate any similar business in Europe.“LOVEFiLM has been innovating on behalf of movie rental customers across Europe for many years and with the advent of the LOVEFiLM player, they are further delighting customers by streaming digital movies for their immediate enjoyment,” said Greg Greeley, Amazon’s Vice President of European Retail. “LOVEFiLM and Amazon have enjoyed a strong working relationship since LOVEFiLM acquired Amazon Europe’s DVD rental business in 2008, and we look forward to a productive and innovative future.”
“The deal is a winner for the members who love LOVEFiLM because of its value, choice, convenience and innovation in home entertainment,” said Simon Calver, Chief Executive of LOVEFiLM International. “With Amazon’s unequivocal support we can significantly enhance our members’ experience across Europe.”
The acquisition is subject to customary closing conditions, including regulatory approvals, and is expected to close in the first quarter of 2011.
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