ITV to buy Friends Reunited for €177m
Broadcaster ITV unveiled a £120m (€177m) deal for Friends Reunited today in a move that dramatically boosts the fortunes of its founders.
Steve and Julie Pankhurst, the husband-and-wife team who set up the website with their business partner five years ago, stand to net around £30m (€44.2m) from the deal.
ITV wants to link the website, which has 15 million members in the UK, with ITV.com in areas such as dating, recruitment and classifieds.
The broadcaster will buy the group for an initial sum of up to £120m (€177m), and a further payment of up to £55m (€81m) may be made during 2009 based on performance targets.
Around 60% of the business is owned by the Pankhursts and their business partner Jason Porter, with the rest held by management after a buy-in in 2003.
Friends Reunited has expanded rapidly and now helps people trace their family tree, as well as reuniting them with old colleagues, neighbours and school friends.
Around 50% of the UK adult online population are thought to be registered on the site.
Julie Pankhurst came up with the idea for the site in 1999 as a way of finding out how many of her old schoolfriends were pregnant like herself.
Her software engineer husband and Mr Porter then set to work on setting up the site and Friends Reunited was launched in 2000 from a back bedroom of the Pankhursts’ house in north London.
It grew so quickly that it soon became a full-time job, handling five million hits a day within a year of its launch.
The Pankhursts gave up the day-to-day running of the site in 2003 when they handed over control to a management team, but retained a stake in the business. The move helped generate additional investment to take Friends Reunited forward.
Mr Pankhurst said: “When we started Friends Reunited in our spare bedroom in July 2000 we had no idea that what began as a hobby would gain phenomenon status, let alone develop into a family of successful websites.”
He said it was time for the couple to leave the company, knowing it was in safe hands.
ITV said the acquisition would allow it to cash in on the surge in demand for broadband, which is set to reach 50% of homes by 2010.
It said there were no plans to merge Friends Reunited with its other websites but the sites would feature links to each other.
ITV said the Genes Reunited business was the ``real engine of growth'' within Friends Reunited.
The number of people registered on this site rose to 46 million from 40 million in the last two months.
Jeff Henry, director of ITV Consumer, said the deal ensured ITV had an “unmatched commercial presence in the UK on television and online”.
