The acquisition of “Lego Masters” company Greenbird looks a compelling deal for STV Studios, the production arm of Glasgow-based media group STV.

The £24m transaction will more than treble the number of returning series produced by the enlarged group, ensuring a stronger flow of recurring revenues, and more than doubles STV Studios’ portfolio of creative production labels to a total of 24 businesses.

Founded in 2012 by Jamie Munro and Stuart Mullin, Greenbird was initially backed by BBC Worldwide. Israeli media firm Keshet, the company responsible for transporting Homeland to the US market, acquired a majority stake in Greenbird in 2018.

Keshet has decided to sell the business, which specialises in the “unscripted” production of entertainment and factual shows, in what appears to be a shift in strategy. The Israeli group says it will invest the proceeds from this disposal to expand its global drama business.

READ MORE: Glasgow's STV snaps up Greenbird Media in £24m deal

For its part, STV is anticipating an immediate revenue bump of at least £20m in the second half of this financial year from the acquisition of Greenbird. That equals nearly 15% of total revenues generated by the group – including its broadcasting activities – for the whole of last year.

STV chief executive Simon Pitts said the deal will also immediately boost profit margins within the studio division, and in terms of affordability, “we have funded the deal from within our existing resources”.

With bases in London, Glasgow, Cardiff, Belfast, Brighton and Manchester, Mr Pitts further contends that STV Studios is now well-placed to take advantage of the expansion in production outside the south-east of England. The regional metric has been expanding at an even faster pace than growth in the global and UK content market as part of the UK Government’s “levelling up” agenda.

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With annual revenues of at least £70m – up from £24m in 2022 – STV Studios is set to leapfrog Cardiff's Bad Wolf to become the UK’s second-largest regional production outfit, as measured by the list of nations and regions producers published annually by industry trade magazine Broadcast. Including minority shareholdings, STV Studios will be close to reaching par with Hollyoaks producer Lime Pictures of Liverpool with annual turnover of approximately £110m.

“It’s not just about revenue, obviously, it’s about profitability and reputation, but it gives us a good target to go for, and once we get there we’ll have to set another target,” Mr Pitts said.