FriendFinder Networks Could Look To Sell Non-core Businesses

MERGER MARKET - Oct 26 - FriendFinder Networks, formerly known as Penthouse Media, filed for an IPO in December, anticipating $460m in proceeds to help pay off its debt. FriendFinder could look to sell off non-core pieces of its business that may be distracting to potential investors including GradFinder and Christian dating site BigChurch, online dating industry consultant Mark Brooks said. The company would likely keep its highly lucrative adult sites. Its adult social networking and live interactive video sites comprised 95% of the company’s revenue, as of six months ended 30 June 2008. FriendFinder’s international properties could also be spun out to a media company with more expertise in certain geographic markets, said Noel Biderman, CEO of Toronto-based Avid Life Media, the holding company of dating sites like HotOrNot and Ashley Madison. He pointed to IAC-owned Match which took a 27% stake in European dating operator Meetic in February, in exchange for Match’s European operations, as an industry example of this. In the case of FriendFinder, its Latino dating site Amigos has a strong membership base, and could be sold to an acquirer that can better grow and monetize the brand, Brooks noted. FriendFinder’s sites may fetch 7x to 8x EBITDA, Biderman said, using Match’s USD 80m acquisition of People Media in July as a comparable transaction. FULL ARTICLE @ OPW

Mark Brooks: FriendFinder's successful IPO and continued strong performance is critical for the reputation of the internet dating industry. FriendFinder could indeed look to sell its non-core businesses. Here's what I told the reporter..."GradFinder is a significant property that could be developed out to compete with Classmates.com.  ...BigChurch is a misfit community for them. They have been chastised by the Christian community for running the site. It should really be sold. Amigos has lots of traffic, is a great name, but South America still doesn't monetize anywhere near as well as the rest of the world.  So its a longer term play for a potential acquirer, but the future is pretty clear, it will eventually make good money. FriendFinder needs to have money in the bank, and make good money quickly, so I think these communities would be most suitable for selling."

See all posts on FriendFinder           See all posts on Match.com
See all posts on BigChurch              See all posts on Meetic
See all posts on HotorNot                See all posts on Amigos
See all posts on AshleyMadison       See all posts on People Media

 

Comments

[David Evans]

How is the FFN IPO is critical to the reputation of the industry? It's an IPO to get out from under an enormous debt. People aren't going to stop dating because an IPO was pulled or underperformed.

We've talked for years about the impending IPO, it's exciting that it's possibly around the corner (could easily be scrubbed at the last minute) but that the same time, doesn't mean mush to the rest of the industry, because so few sites are in a position to IPO.

How do you know if Amigos will ever make a lot of money? Are they real profiles, lots of active members, ramping up revenue? Without knowing the details of the company, it's just conjecture.

Gradfinder (8,000 monthly visitors) vs. Classmates (18M monthly visitors). No contest.

[Mark Brooks]

We don't have many IPO's in the idating industry, which is precisely why it's going to drive a fair deal of attention. If it bombs, its going to make it more difficult to raise startup money. When end users read the press, that's going to effect their impression of not only FriendFinder, but internet dating as a whole.

I worked at FriendFinder in 2003-2004.

[E Swearingen]

Well it bombed!!!