New Comcast fund makes big bet on ailing Groupon
Former Comcast Corp. CFO Michael Angelakis, now running a $4 billion Comcast-backed investment fund, made his first big bet Monday with a $250 million investment in battered online-deals site Groupon.
Former Comcast Corp. CFO Michael Angelakis, now running a $4 billion Comcast-backed investment fund, made his first big bet Monday with a $250 million investment in battered online-deals site Groupon.
Angelakis will join the Groupon board as part of the transaction, Groupon said.
Angelakis, Comcast's former chief financial officer and vice chairman, launched Atairos earlier this year, with offices in New York and Bryn Mawr. Comcast has agreed to fund Atairos with $4 billion.
Atairos will be purchasing $250 million in senior notes that are due in 2022 and can initially be converted into Groupon shares at $5.40 a share, Groupon said Monday.
The Chicago company's shares closed at $4.29, up 9.4 percent.
Revenues have been mostly flat, with $3.1 billion in 2015 compared with $3 billion in 2014. But profits evaporated. The company lost $79.8 million from operations in 2015 after earning profits of $30.7 million in 2014, according to a Groupon regulatory filing.
Atairos views Groupon - whose stock traded above $26 a share in late 2011 - as a bargain and believes that Comcast and Groupon can leverage their relationships with customers and businesses for the benefit of each other, say those knowledgeable about the transaction.
Groupon operates in 28 countries and in late December had 650,000 deals available to consumers.
Atairos is run independently of Comcast by Angelakis, though Comcast and Atairos are expected to work closely. Angelakis has also said that Atairos will hold investments and grow these companies, not flip them.
"Our partnership with Atairos will help accelerate our transformation while better positioning us to execute on our strategy and mission to build the daily habit in local commerce," Groupon CEO Rich Williams said in a statement.
The deal is Comcast's latest foray into digital media after previously announcing stakes in BuzzFeed and Vox Media. Comcast also is rumored to be interested in acquiring Yahoo and recently began selling its cable and Internet services on online retail giant Amazon.
"Groupon is an established leader in connecting customers with local business," Comcast Cable CEO Neil Smit said in a statement. "The potential in combing Groupon's local expertise with Comcast's vast subscriber and advertiser network is something we look forward to closely exploring together."
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