LoveFilm, the online DVD rental firm, has been bought by the US retail giant Amazon, it has been announced.
The online retailer, which previously owned 42% of LoveFilm, after it bought out one of its venture capital backers, made a bid last year to buy the remaining 58%, in an acquisition deal worth a reported £200m. The final price paid by Amazon has not yet been disclosed.
The two companies already have experience working together, after Amazon combined its European rental operation with LoveFilm in 2008.
Greg Greeley, Amazon's vice president of European Retail, told Reuters: "LoveFilm and Amazon have enjoyed a strong working relationship since LoveFilm acquired Amazon Europe's DVD rental business in 2008, and we look forward to a productive and innovative future,"
LoveFilm’s annual loss fell to £1.2m in 2008 and the company generated around £73m of turnover, when chief executive Simon Calver told Growing Business that turnover would breach £100m in 2009.
In just over seven years, LoveFilm, has grown to become one of Europe’s largest entertainment subscription businesses with over 1.5 million subscribers across the UK, Germany, Sweden, Norway and Denmark.
It is believed that Amazon’s takeover could give the UK business a stronger position in the European market, as LoveFilm heads towards the digital market by offering online movie streaming. Amazon has expertise in digital services with its Kindle device, which offers digital book purchase and lately it has offered downloadable TV shows.
Investor in LoveFilm, Dharmash Mistry, partner at Balderton Capital, commented: “I would like to congratulate Simon and his team for creating and nurturing one of the most significant internet businesses in Europe. This is a great deal for LoveFilm and Amazon.
“Amazon has terrific reach and a family of complementary entertainment businesses providing LoveFilm with the platform to turbocharge its growth. LoveFilm is the Netflix of Europe and it will be central to Amazon’s European and global strategy.”
© Crimson Business Ltd. 2011