AOL is reportedly paying $315 Million for the Huffington Post with most of the payment in cash. Must be some former Time Warner shareholders who remember how it worked out for them to take stock. The strategy is to bring content to AOL’s pipeline. Sound familiar? Huffington currently has revenues of around $50 Million – so this represents a purchase price of 6.3 X REVENUE, not EBITDA! Assuming they can generate a 20% EBITDA return this means to me AOL needs to grow the revenues by fivefold to $250 Million with a $50 Million EBITDA in order to generate a 15% return on their investment. Seems like a tall order to me, especially in this highly competitive and fickle market. Looks like a great deal for Arianna Huffington. I’d be interested in what others think about this deal.
AOL Acquiring Huffington Post
- February 11, 2011
- By Capstone under M & A News, Mergers and Acquisitions
- Leave a reply
- Acquisition Strategy, acquisitions, AOL, business acquisitions, Capstone, David Braun, External Growth, huffington post, M&A, M&A News, mergers, Mergers and Acquisitions
Capstone Strategic is the meeting point of passion and process in the field of mergers and acquisitions. Founded in 1995 by CEO David Braun, Capstone meets the unique demands of mid-market companies and their corporate growth initiatives. We help clients achieve their dreams through proactive strategic growth programs and successful acquisitions. Put simply, we help companies grow.