Also recasts guidance for first quarter and full year 2015
CHICAGO--(BUSINESS WIRE)--
Groupon
announced today it has entered an agreement to sell a controlling 46
percent fully diluted stake in Ticket Monster (TMON), its South Korean
e-commerce business, for $360 million, to a partnership formed by
leading global investment firm KKR and Hong Kong-based Anchor Equity
Partners. The investments value Ticket Monster at $782 million on a
fully diluted basis, assuming a full vesting of management's 13 percent
stake. At closing, Groupon will retain a fully diluted 41 percent stake
in TMON.
The gain on the sale is expected to be between $195 million and $205
million on a pre-tax basis and will be recorded at the close of the
transaction. Per the agreement, Groupon will receive $285 million in
cash, with the remainder paid to TMON. Groupon acquired TMON in January
2014 for $260 million.
"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 TMON sale is expected to close in the second quarter of 2015,
subject to regulatory and customary closing conditions. Groupon intends
to use the proceeds from the sale for general corporate purposes and
share repurchases.
TMON will be treated as a discontinued operation for purposes of
financial reporting, effective in the first quarter of 2015.
Accordingly, Groupon has recast its guidance for the first quarter and
full year of 2015. Reflecting the TMON sale, as well as changes in
foreign exchange rates, Groupon now expects first quarter 2015 revenue
between $720 and $770 million, adjusted EBITDA between $58 and $78
million and non-GAAP earnings per share (from continuing operations)
between $0.01 and $0.03. For the full year, Groupon continues to expect
adjusted EBITDA of greater than $315 million. This recast guidance is
based on preliminary estimates and is subject to change.
Groupon will report results for its 2015 first quarter on May 5, 2015.
The company also announced its Board of Directors has approved a new
$300 million share repurchase program, subject to the closing of the
TMON sale. The authorization includes the flexibility for accelerated
repurchases and purchases over time in the open market in accordance
with our current practice. The new plan is expected to commence with the
closing of the TMON sale and will run through August of 2017. Groupon
expects to continue repurchases under its existing $300 million share
repurchase program approved in 2013. That program had $83 million of
authorized repurchases remaining as of March 31, 2015, and is set to
expire in August of 2015. Share repurchases are subject to market
conditions and other factors.
Further details about the transaction and share repurchase program can
be found in Groupon's Form 8-K, filed today with the SEC, as well as on
slides posted to the company's Investor
Relations website.
About Groupon
Groupon (NASDAQ:GRPN) is a global leader of local commerce and the place
you start when you want to buy just about anything, anytime, anywhere.
By leveraging the company's global relationships and scale, Groupon
offers consumers a vast marketplace of unbeatable deals all over the
world. Shoppers discover the best a city has to offer on the web or on
mobile with Groupon Local, enjoy vacations with Groupon Getaways, and
find a curated selection of electronics, fashion, home furnishings and
more with Groupon Goods.
Groupon is redefining how traditional small businesses attract, retain
and interact with customers by providing merchants with a suite of
products and services, including customizable deal campaigns, credit
card payment processing capabilities, and point-of-sale solutions that
help businesses grow and operate more effectively. To search for great
deals or subscribe to Groupon emails, visit www.Groupon.com.
To download Groupon's top-rated mobile apps, visit www.groupon.com/mobile.
To learn more about the company's merchant solutions and how to work
with Groupon, visit www.GrouponWorks.com.
Forward-Looking Statements
This announcement contains forward-looking statements that involve risks
and uncertainties, and actual results could differ materially from those
discussed. Factors that could cause or contribute to such differences
include, but are not limited to, the factors included under the headings
"Risk Factors" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations" in the company's Annual Report on
Form 10-K and subsequent Quarterly Reports on Form 10-Q, copies of which
may be obtained by visiting the company's Investor Relations web site at http://investor.groupon.com
or the SEC's web site at www.sec.gov.
You should not rely upon forward-looking statements as predictions of
future events. Although Groupon believes that the expectations reflected
in the forward-looking statements are reasonable, it cannot guarantee
that the future results, levels of activity, performance or events and
circumstances reflected in the forward-looking statements will be
achieved or occur. Moreover, neither Groupon nor any other person
assumes responsibility for the accuracy and completeness of the
forward-looking statements. Groupon undertakes no obligation to update
publicly any forward-looking statements for any reason after the date of
this press release to conform these statements to actual results or to
changes in our expectations.
Non-GAAP Financial Measures
In addition to financial results reported in accordance with U.S.
generally accepted accounting principles (U.S. GAAP), we have provided
the following non-GAAP financial measures in this release: adjusted
EBITDA and non-GAAP earnings (loss) per share. These non-GAAP financial
measures are presented to aid investors in better understanding
Groupon's performance and to facilitate comparisons to many of our peers
who present similar measures. However, these measures are not intended
to be a substitute for those reported in accordance with U.S. GAAP.
These measures may be different from non-GAAP financial measures used by
other companies, even when similar terms are used to identify such
measures.
Adjusted EBITDA is a non-GAAP financial measure that we define as
net income (loss) excluding income taxes, interest and other
non-operating items, depreciation and amortization, stock-based
compensation, acquisition-related expense (benefit), net, and income
(loss) from discontinued operations. Our definition of Adjusted EBITDA
may differ from similar measures used by other companies, even when
similar terms are used to identify such measures. Adjusted EBITDA is a
key measure used by our management and Board of Directors to evaluate
operating performance, generate future plans and make strategic
decisions regarding the allocation of capital. Accordingly, we believe
that Adjusted EBITDA provides useful information to investors and others
in understanding and evaluating our operating results in the same manner
as our management and Board of Directors.
Non-GAAP earnings (loss) per share adjusts our earnings (loss)
per share to exclude the impact of stock-based compensation expense,
amortization of acquired intangible assets, acquisition-related expense
(benefit), net, non-operating foreign currency gains and losses on
intercompany balances, and income (loss) from discontinued operations,
and the income tax effect of those items. We believe that this non-GAAP
financial measure provides useful supplemental information for
evaluating our operating performance.
Groupon
Bill Roberts, +1 312-459-5191
billr@groupon.com
Source: Groupon
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