Penthouse Publisher to Buy L.A. Daily Deal Operator JigoCityMonday, September 12, 2011
FriendFinder Networks Inc., which publishes Penthouse and operates adult social networking sites, plans to buy Los Angeles daily deal web site operator JigoCity for up to $65 million in stock and warrants.
The Boca Raton, Fla. operator of adultfriendfinder.com and cams.com on Monday said the acquisition would help it expand its social networking business in the Asia-Pacific market. JigoCity, which is owned by BDM Global Ventures Ltd., provides advertiser daily deals in Australia, China, Hong Kong, Singapore, Taiwan and Brazil. It plans to expand by up to four countries by the end of the year.
“China and the Asia-Pacific region represent one of the fastest growing areas of the world in terms of economic growth, internet usage and middle and upper class consumers,” Chief Executive Marc Bell said in a statement. “In addition, we believe this acquisition demonstrates the innovative ways we continue to leverage our large user base and the web traffic generated by our network of web sites."
JigoCity, founded by Tony Bobulinski, Michael Dorman and Joshua Mallamud, has more than 1 million members and revenue of $1.1 million in August. It will continue to be operated out of Los Angeles after the merger.
Assuming a cashless exercise of all the warrants at the highest exercise price, the merger consideration will be about $65 million, said FriendFinder, which trades on the Nasdaq. It will pay about 1.6 million shares and 6.4 million warrants for stock with exercise prices ranging from $5 to $18 per share.
The stock of FriendFinder was trading at $2.77 in Monday midday trading.