(SHDP.L) Shed Media PLC Buy/Sell

production companies specialising in high profile TV brands in drama,

docu-drama, factual formats, science and history.

has operated in the UK and the US for over 20 years.

'New Tricks' for BBC1 - both the highest rating programmes in their genres

in 2007.

reaching £19.5m in the year ended 30 June 2007 delivering EBITDA of £2m.*

year ending 2008.

including 'The History House' franchise, which encompassed '1900's House',

'1940's House' and 'Frontier House'. Recent franchise 'Child Genius'

series for Channel 4.

to be realised.

initial consideration and £5.0m being contingent on performance.

of Shed Media.

and is an excellent fit alongside Shed Productions, Ricochet, Twenty Twenty

and Outright Distribution.

Eileen Gallagher, Chief Executive Officer of Shed Media commented:

"I have greatly admired Wall to Wall for many years and I am absolutely delighted that Alex Graham has chosen to bring his company into Shed Media. Wall to Wall has some of the most successful television brands around and Alex Graham, who joins the Shed Board with immediate effect, will make a great contribution to growing the group."

Alex Graham, Chief Executive, Wall to Wall, commented:

"I am thrilled that Wall to Wall is to become part of Shed Media, which I regard
as easily the most dynamic production and distribution business in the UK. I

have long been an admirer of Eileen Gallagher and her terrific management team, and I'm personally looking forward to working alongside her on the Shed Board
and helping to build the business. What I like about Shed is that it

understands that commercial success is built on long-running programme brands and I'm looking forward to playing my part in creating the next generation of hit Shed shows."

Acquisition Rationale

Shed's strategy has been to grow both organically and through the acquisition of businesses that fit the strict criteria of offering shareholder value, creative fit and where the key talent is tied in by ownership. The acquisition of Wall to Wall is consistent with these principles.

Wall to Wall has a proven track record in creating new, returnable, high quality formats including 'Who Do You Think You Are?' for BBC1. With over 6m viewers, this is one of the highest rated returning factual series in the UK. In drama, Wall to Wall produces 'New Tricks' for BBC1. This highly successful returning drama averages 8 million viewers per episode. Both brands also generate significant ancillary income.

Like Shed, Wall to Wall's focus is on the development of new returning series and formats for increased revenue and growth. Furthermore, broadcasters are increasingly demanding programmes with long-running and returnable potential. Wall to Wall is well placed to deliver these recurring shows. The international
success of 'Who Do You Think You Are?' confirms this. The acquisition of Wall

to Wall is expected to be earnings enhancing in the financial year ending 2008.

Wall to Wall has clearly demonstrated its ability to exploit its key brands through its in-house distribution and ancillary rights business. Integrating this business with Shed's distribution company, Outright Distribution provides scope to explore additional revenue opportunities for the existing library. Outright Distribution will exploit the ancillary rights to Wall to Wall's future product through wider distribution of international, DVD and licensing rights.

The addition of Wall to Wall broadens Shed Media's offerings to broadcasters and is an excellent fit alongside Shed Productions, Ricochet, Twenty Twenty and Outright Distribution.

Wall to Wall has a highly experienced, respected management and creative team led by Alex Graham, who co-founded the Company in 1987. Shed is pleased to announce the appointment of Alex to the Board of Shed Media as an executive Director. Alex Graham has been allotted £5.7m new ordinary shares of 0.1 pence each in the Shed Media as part of the consideration for the acquisition of Wall to Wall.

Consideration

Initial consideration of £20m is to be satisfied as to £10m in cash, £8m in shares and £2m in redeemable loan notes. At completion Shed will have debt of £32m and £4m of redeemable loan notes.

The additional consideration will be satisfied by £0.5m in cash and £4.5m in shares.

Information on Wall to Wall

Wall to Wall was established in 1987 and is one of the UK's largest and most innovative content providers. It has a reputation for producing popular, high quality, and critically acclaimed programming across factual, drama, formats and features for leading UK and US broadcasters. The Company was voted as one of the seven most creative production companies in the world in the Real Screen Global 100 list in 2006.

The Company has won numerous awards including BAFTA, Emmy, Grierson, Peabody and Royal Television Society awards for programmes including 'A Rather English Marriage', 'George Orwell: A Life in Pictures', 'The Media Show', '1900 House' and 'Who Do You Think You Are'.

Wall to Wall has formed strong relationships with a global network of broadcasters. It is a key supplier to the BBC, Channel 4, Discovery Channel US, National Geographic US and PBS. It has long-term relationships with History US, FX, Spike, Bravo, CBC Canada, History Canada, NDR, France 5 and many others. To date, the Company has delivered over 1,000 hours of content, including over 200 of them to US broadcasters.

In the UK, the BBC and Channel 4 are Wall to Wall's main customers. It is in advanced development with ITV regarding a number of programmes including a reality and drama series. The Company continues to strengthen its relationship with the BBC whilst supplying high volumes of content to BBC1 and BBC2. Both BBC3 and BBC4 have provided further opportunities to provide programming, in particular BBC4 has become a key customer. Recent programmes for the BBC include 'Who Do You Think You Are?', 'New Tricks', 'Genius of Photography', and 'Filth: The Mary Whitehouse Story'.

The Company retains the value held in ancillary rights and successfully exploits its key brands including 'Who Do You Think You Are' and 'New Tricks', through its in-house distribution and ancillary rights business. Further growth from this source is expected from repeat series that have been commissioned and are in the pipeline, which continue to generate significant income through international finished programme and format sales. In addition, valuable income is produced from DVDs, video-on-demand, software, music publishing and online propositions.

Financial Information

Year ended 30 June 2006 2007
£ '000 Audited Audited
Revenue 18,604 19,500
Gross Profit 4,721 5,903
Pro-forma EBITDA 1,416 2,062

Director Disclosures

Alex Graham (54) Chief Executive, Wall to Wall, co-founded the company in 1987 and has helped build the business into one of the UK's leading independent content producers. Alex currently holds the following Wall to Wall directorships: Wall to Wall Television Limited, Wall to Wall (Holdings) Limited, Wall to Wall Media Limited, Wall to Wall Drama Limited, Wall to Wall (Egypt) Limited, Wall to Wall S&L 2001 Ltd, Wall to Wall (New Tricks) Limited and Spring Place Services Limited.

Alex is also a director and elected chair of PACT, director of Producers Rights Agency Limited and director of Independent Production Training Fund.

There are no further disclosures to be made under the AIM Rules.

Service agreement of the new executive Director

Alex Graham has signed a service agreement with Shed for remuneration of £140,000 per annum, terminable on 12 months' notice by either Shed or the executive Director. The salary is subject to review by the Company's remuneration committee but there is no contractual entitlement to any increase in basic salary. Directors may be awarded bonuses at the discretion of the Remuneration Committee.

Alex Graham is also subject to non-competition and non-solicitation covenants in favour of the Company for the period of their employment and for 12 months following any cessation of his employment.

Analyst meeting

An analyst meeting will be held at 09.30 today at the offices of Landsbanki Securities (UK) Ltd, 15 St Botolph Street, London EC3A 7QR.

Ingenious Corporate Finance advised the shareholders of Wall to Wall on the transaction.

Shed Productions plc 020 7239 1010

Eileen Gallagher, CEO Jonathon Kemp, FD

Landsbanki
John Craven 020 7426 9000

Makin PR
Sharon Makin 07918 108 195
This information is provided by RNS
The company news service from the London Stock Exchange

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