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Groupon Announces Partial Sale Of Ticket Monster, New Share Buyback Authorization

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Shares of Groupon Inc (NASDAQ: GRPN) rallied last week after The Wall Street Journal reported the company was looking to sell a stake in Ticket Monster at an approximate $800 million premium, marking a hefty premium above the $260 million Groupon paid to acquire the South Korean based deals site last year.

On Monday, Groupon announced that a deal with a consortium of investors (led by global investment firm KKR and Anchor Equity Partners) has been finalized. Groupon has agreed to sell 46 percent of its stake in Ticket Monster for $360 million, implying a $782 million valuation of South Korea's second largest e-commerce business.

Shares were up more than 4 percent in Monday's pre-market session.

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. Groupon will receive $285 million in cash from the sale, with the remainder paid to Ticket Monster.

Related Link: Gene Munster: Divesting Groupon Unlocks $1 Billion In Value

"As the Korean market developed, it became obvious that Ticket Monster 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 in a press release. "We look forward to watching Ticket Monster's success as a continued large shareholder in the company."

The sale is expected to close in the second quarter of 2015 and is subject to standard regulatory and customary closing conditions. The company will use the proceeds from the sale for "general corporate purposes" and to partially fund a newly approved $300 million share repurchase program through August 2017, subject to the closing of the Ticket Monster sale.

Groupon already has an existing share repurchase program with $83 million of an initial $300 million authorized repurchases remaining as of March 31, 2015, and set to expire in August 2015.

 

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Posted-In: Anchor Equity Partners eric lefkofsky KKR South Korea Ticket MonsterNews Buybacks Asset Sales

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