NBC Universal diversifies

Seeking to stretch its wings in Europe, NBC Universal on Tuesday said it would buy London-based Sparrowhawk Media, which includes the U.K. Hallmark Channel, from a group of private investors.

The move signals NBC Universal’s eagerness to expand its cable TV business by adding international channels, a priority of parent company General Electric Co. NBC Universal currently has 12 channels in Europe and Latin America, including Sci-Fi, CNBC Europe and a movie channel, Studio Universal.

“People are trying to diversify overseas because the U.S. market is so tough these days,” said Derek Baine, a cable television analyst for SNL Kagan. “There is still a lot of potential growth internationally.”

The companies did not disclose terms of the transaction. However, according to one person familiar with the deal, NBC Universal agreed to pay about $350 million for the business, which includes Hallmark Channels that reach 60 million subscribers in Europe, the Middle East, Africa, Australia and Asia, international rights to 580 Hallmark movies and a transmission facility near Denver.

Sparrowhawk already airs NBC-owned shows, including “Law & Order” and “House.”

Sparrowhawk Media -- whose investors include private equity giant Providence Equity Partners, British venture capital firm 3i, and management shareholders -- scooped up U.K. Hallmark two years ago from Crown Media Holdings for about $210 million. Crown Media, which owns the U.S. Hallmark Channel, was eager to sell the company to pay down debt.

Baine said Sparrowhawk negotiated “a nice price” from NBC Universal.

The acquisition brings NBC Universal a step closer to its goal of doubling its international revenue from its current level of about $2.5 billion a year to $5 billion a year by 2010.

“We are looking to be in high-growth businesses like international and digital and to get out of slower-growth businesses,” NBC Universal Chief Executive Jeff Zucker said in an interview. He declined to identify which assets he would like to shed.

Zucker would not elaborate on the size of his acquisition purse. NBC Universal also is exploring a purchase of U.S. cable channel Oxygen from billionaire Paul Allen, talk-show host Oprah Winfrey and its chief executive, Geraldine Laybourne.

Baine estimates the value of Oxygen at about $1.2 billion.

NBC Universal is pursuing Oxygen, in part, to better appeal to women viewers. Two years ago, the company paid $600 million to buy the female-oriented iVillage website and has struggled to create new programming that would work both on television and Internet platforms as a way to grow its audience and advertising revenues.

Bringing in more women was also part of the motivation for the Sparrowhawk acquisition, said Peter Smith, president of NBC Universal International.

“These tend to be more female-oriented channels,” Smith said.

In addition to the Hallmark Channel, Sparrowhawk has a movie channel, Movies 24, and is planning a fall launch of two new channels -- family channel KidsCo. and Diva TV for women.

“This is about balancing out our international portfolio,” Smith said, adding that NBC’s lineup includes more male-skewing channels.

Zucker would not say whether buying U.K. Hallmark signaled his interest in buying the U.S.-based Hallmark channel. He only would say: “The two are not related.”

For his part, Hallmark Channel Chief Executive Henry Schleiff said, “We don’t talk about other transactions,” but added that NBC Universal’s acquisition and its interest in Oxygen represented the value it placed on cable channels.

“There is a scarcity of assets and less independent channels around,” said Schleiff.

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meg.james@latimes.com