APN News & Media, the Australian publisher of the New Zealand Herald newspaper, has 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 $A2 million cash and eight per cent of its own stock for brandsExclusive, APN said in a statement. The sale is to be concluded on Wednesday.
The Sydney-based media company acquired 82 per cent of the business in 2012 for $S36 million up front and a further payment tied to earnings targets.
It booked an $A20.5m impairment charge to write down goodwill in the first half of 2013, citing increased competition in online retailing. While sales rose 30 per cent in that period, it recorded a pretax loss of $A2.6m.
AussieCommerce "provides the necessary scale for brandsExclusive to prosper in the increasingly competitive online retail environment", said APN chief executive Michael Miller
"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 per cent stake in APN Outdoor to joint venture partner Quadrant Private Equity for about $A69m 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 Cr'me 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.
