After acquiring South Korean e-commerce company Ticket Monster (TMON) 14 months ago, Groupon announced today that it will sell 46 percent of fully-diluted stake in TMON to worldwide investment firm KKR and Hong Kong’s Anchor Equity Partners.
Groupon is selling the stake for $360 million. In Jan. 2014, Groupon acquired TMON for $260 million. On a fully-diluted basis and assuming a full vesting of management’s 13 percent stake, the investments value TMON at $782 million.
The gain on the sale, which Groupon expects will close in Q2 this year, is predicted to be between $195 million and $205 million, pre-tax. The agreement calls for Groupon to receive $285 million in cash. TMON will receive the remaining amount of money. Groupon will maintain 41 percent stake.
"As the Korean market developed, it became obvious that TMON would benefit from additional resources and local expertise in its drive to be the leading social commerce company in Korea," Groupon CEO Eric Lefkofsky said in a statement. "We look forward to watching TMON's success as a continued large shareholder in the company."
Groupon also announced a $300 million share repurchase program, approved by its Board of Directors and contingent upon the close of the TMON sale. The program should run through Aug. 2017.
The TMON sales will be classified in Q1 financial reporting as a discontinued operation. Groupon predicts Q1 revenue to be between $720 million and $770 million, with adjusted EBITDA falling in the range of $58 million and $78 million.
Groupon will announce Q1 earnings on May 5.
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Groupon to sell stake in Ticket Monster, predicts Q1 revenue $720M+