Macquarie pays £166m for BBC unit

Macquarie, the Australian bank and infrastructure group, on Monday purchased BBC Broadcast, the iconic institution's digital media unit, for £166m ($303m).

Under the deal, there will be a one-year moratorium on compulsory redundancies and Macquarie said it intended to retain the management team.

The sale requires the approval of the Department for Culture, Media and Sport, and the BBC said it hoped to complete the deal by the end of July.

Macquarie beat Apax Partners, the private equity group, Exponent Private Equity, and Thomson/Technicolor. The BBC said Macquarie's bid was the highest and that it had “showed real capabilities in managing a contractual long-term partnership”.

BBC Broadcast makes and distributes multimedia content transmissions, providing access services, such as subtitles, as well as creative services, such as promotional trailers and branded content, for mobile and web-based services. The business will have an exclusive supplier contract with the BBC until at least 2015.

BBC Broadcast is forecast to make pre-tax profits of £2m on revenues of £107m this year, of which business with the corporation accounts for more than 90 per cent.

“What we have here is essentially a privatisation of an iconic British business,” said Michael Cook, chief executive of Macquarie Capital Alliance Group, a subsidiary of Macquarie. “It's a unique asset underpinned by very significant contracted cashflows but with the potential to expand internationally.”

The deal is the third for MCAG, the latest listed investment vehicle to be rolled out by Macquarie, which now has more than a dozen such funds, mainly listed in Australia but also increasingly on overseas exchanges.

The new fund, which has a broad investment mandate, has already bought a stake in an aged care business in Australia as well as in Yellow Brick Road, a European directories business.