APN exits brandsExclusive after writing down goodwill on 1 ½-year investment
Feb. 12 (BusinessDesk) - APN News & Media, the Australian publisher of the New Zealand Herald newspaper, agreed to sell its unprofitable brandsExclusive online shopping site, having slashed the value of goodwill on a business acquired in 2012.
E-commerce group AussieCommerce, which operates sites including deals.com.au, will pay A$2 million cash and 8 percent of its own stock for brandsExclusive, APN said in a statement. The sale is to be concluded today.
The Sydney-based media company acquired 82 percent of the business in 2012 for A$36 million upfront and a further payment tied to earnings targets. It booked an A$20.5 million impairment charge to write down goodwill in the first half of 2013, citing increased competition in online retailing. While sales rose 30 percent in that period, it recorded a pretax loss of A$2.6 million.
“provides the necessary scale for brandsExclusive to
prosper in the increasingly competitive online retail
environment,” said APN chief executive Michael
“This deal is in the best interests of both brandsExclusive and APN shareholders.”
The sale marks a further step in APN’s plan to shrink back to “core media and digital businesses,” having sold its 48 percent stake in APN Outdoor to joint venture partner Quadrant Private Equity for about A$69 million last year. Its other digital assets include the GrabOne daily deal site and iNC Digital Media, which offers online market and analytics services.
Last month, the Commerce Commission approved the sale of APN’s magazines NZ Woman’s Weekly, Simply You, Simply You Living, New Zealand Listener and Crème to Germany’s Bauer Media Group, leaving it with New Idea, That’s Life and Girlfriend magazines published under licence from Pacific Magazines Group Australia.
Shares of APN were last at 43 Australian cents on the ASX and have gained about 46 percent in the past 12 months, more than twice the gains of the S&P/ASX 200 Index. The shares have fallen from about A$2.50 in mid-2010 and are rated ‘hold’ based on the consensus of 11 analysts polled by Reuters, with a median price target of 36 Australian cents.