Putting an end to months of speculations, Groupon has finally announced its plans to sell its controlling 46 percent stake in its South Korean venture Ticket Monster for $360 million to private equity firm KKR and Hong Kong’s Anchor Equity Partners.
Valuing Ticket Monster (TMON) at $782 million, the deal would put $285 million cash in Groupon’s pocket and the remaining $75 million in TMON’s war chest.
“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,” said Groupon CEO Eric Lefkofsky. “We look forward to watching TMON’s success as a continued large shareholder in the company.”
The sale, which comes over a year after Groupon bought TMON from Living Social Inc. for $260 million, is happening at a time when the company’s stock value has mostly been trading just a little over its 2011 initial public offering price.
Many have reportedly called the move a step in direction of establishing Groupon as a stronger player in the eCommerce market as it is realigning its business strategy from making money off email daily alerts to locking horns with players like Amazon and eBay.
Funds generated from the sale, which is expected to close in the second quarter of 2015, are intended to be used for general corporate purposes and share repurchases, the company said in a statement.
While continuing on its existing $300 million share repurchase program, which has $83 million in repurchases remaining, the company announced another $300 million share repurchase program to utilize the proceeds from the sale.
Having finally caught a deal, Groupon has revised its numbers reflecting the TMON sale. In the first quarter of 2015, the company expects revenue between $720 and $770 million, adjusted EBITDA between $58 and $78 million and non-GAAP earnings from continuing operations between $0.01 and $0.03 per share.