Providence Said to Sell 10% Hulu Stake for $200 Million
Providence Equity Partners Inc. sold its 10 percent stake in Hulu.com back to company for $200 million, in a deal that values the video service at about $2 billion, two people with knowledge of the agreement said.
Hulu, based in Los Angeles, is borrowing the money to fund the repurchase, according to the people, who declined to be identified because the terms aren’t public. Separately, Hulu Chief Executive Officer Jason Kilar will receive about $40 million, the people said.
The holding’s buyout from Providence, a private-equity group that also owns a stake in Univision Communications, consolidates ownership of the video service with News Corp. (NWSA), Comcast Corp. (CMCSA) and Walt Disney Co. (DIS) Hulu, an early entrant in the online video market, competes with Netflix Inc., which has increased its focus on TV shows after streaming movies at first.
Elisa Schreiber, a Hulu spokeswoman, and Andrew Cole, an outside spokesman for Providence, declined to comment. The deal closed last week, the people said.
Providence Equity Partners, News Corp. and Comcast’s NBC Universal, then part of General Electric Co. (GE), started Hulu in 2007. Disney acquired a stake in April 2009.
Techcrunch reported the deal’s completion yesterday.
The media companies were near agreement to buy out Providence’s stake for $200 million, people familiar with the matter told Bloomberg News in April. Employees of Hulu, including Kilar, would be allowed to sell shares, the people said then.
Providence invested $100 million in Los Angeles- based Hulu when the venture began in 2007. The service offers online episodes of television shows such as “30 Rock” from Comcast’s NBC, Fox’s “Family Guy” and ABC’s “Grey’s Anatomy.”
In April, Hulu said its $8-a-month Hulu Plus, which lets users view an expanded library of shows on game consoles and mobile devices, had more than 2 million subscribers.
Disney, News Corp. and Comcast’s NBC Universal each held roughly equal Hulu stakes, while employees owned about 10 percent, people said then.
Disney and News Corp. have representatives on Hulu’s board. NBC Universal relinquished its Hulu board seat and oversight as part of federal approval of its acquisition by Philadelphia- based Comcast.
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