Lovefilm ponders £100m flotation
Lovefilm, Europe’s largest online DVD rental group, has appointed Goldman Sachs to advise it ahead of a possible £100 million flotation. Goldman is reviewing all options for the business, including a possible sale or a float. A flotation could value the business, which has operations in the UK, Sweden, Norway, Denmark and Germany, at about £100 million. But an adviser to the company said that a flotation was likely to be a year away.
Lovefilm, whose backers include Esprit Capital Partners, the former Cazenove Private Equity and Index Ventures, allows subscribers to order films online, which are then posted out with a prepaid return envelope. There is no deadline or “late fees” for returning the fim and once they have been received others can be ordered.
The attraction to buyers lies in Lovefilm’s database of subscribers. In four years Lovefilm has amassed nearly 500,000 subscribers. It generates more than five million postal transactions each month. Online DVD rental is putting increasing pressure on traditional bricks-and-mortar film rental stores such as Blockbuster.
Screen Digest has forecast that, by 2009, online rental companies will have one quarter of the market in America and one third in Europe.
Lovefilm Possible Sale or Float
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