Hulu: Owners Set To Buy Providence Equity’s Stake

Hulu, the popular online movie and tv service, will soon see a change in shareholders. While Providence Equity Partners has not announced that they plan to sell their share of Hulu for about $200 million, unnamed sources say that a sale is imminent.

The private stock sale would reportedly lead to a bigger share for media companies News Corp. and Walt Disney Co., who currrently own a part of the 5 year old company.

Since its inception in 2007, Hulu has grown to over 2 million paid subscribers to Hulu plus, and sees about 38 million visitors to the free portion of its site. This free portion offers catch-up episodes of popular tv shows, such as “Glee,” “Revenge,” “The Daily Show with Jon Stewart,” and “Late Night with Jimmy Fallon.”

The Providence sale could put the company’s value at over $2 billion, a milestone for its investors. Unnamed sources told reporters that Providence is selling its 10 percent share in the online media company for around $200 million, a 100 percent gain from its original investment of $100 million in 2007.

David Bank, an analyst at RBC Capital Markets in New York, said during an interview that:

“This would be the optimal outcome. The real value of Hulu will be discovered on a longer time frame than what’s likely optimal for Providence.”

Providence originally invested the money in 2007, along with founding contributors NBCUniversal and News Corp. Disney joined the trio in 2009. The agreement, first reported by Bloomberg Business Week, would also allow for Hulu’s chief executive Jason Kilar, as well as other ranking members of management, to vest some shares. One person close to the company stated that Kilar is expected to stay on as chief executive to run the company, at least for a short time.

Check out more information about the last time Hulu’s owners considered a sale:

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