Invite colleagues
There seems to be an inevitable feeling to news out that Focus Media has entered into a definitive share purchase agreement to sell a 62% of its Internet subsidiary, Allyes Online Media Holdings Ltd. From my opinion, the news has been a long time coming as it seems Allyes seemed to loose it's way about a year or so ago and I could imagine that the parent company would be looking for an exit.
Today's news is that the purchaser is Silver Lake, described on their website as a private investment firm has purchased the 62% for US$124 million. I remembered thinking three years ago when Focus Media paid US$225 million that this was either going to be a cheap price should they get the synergy right or way too much should the team misfire and fragment. Looks like history is judging.
Under the terms of the agreement, Silver Lake will gain equity ownership of Allyes held by Focus Media. Simultaneously with the signing of the agreement, certain remaining shareholders of Allyes also agree to sell their equity ownership in Allyes to Silver Lake, so that following the series of transactions, Silver Lake will own a controlling stake in Allyes.
For some history of Allyes: Established in 1998, Allyes is one of the largest online advertising providers in China. Headquartered in Shanghai, China, Allyes has branch offices in Beijing, Shenzhen, Guangzhou and Chengdu.
In a later post, I want to look at what went right and what went wrong for Allyes. Seems that only a few years ago that this digital marketing company was riding high and considered to be untouchable. Just look at the price Focus Media paid- US$ 224m
Does this move by Silver Lake give you confidence that we will seem Allyes gain some former glory or is this move going to accelerate the perception of a company in trouble? You comments and thoughts?
Written on Sunday, 01 August 2010 10:40 by Matt McDougall