Sale Leaves Demand Media with a More Focused Portfolio and
Underscores Its Commitment to Growing and Enhancing Its Brands
SANTA MONICA, Calif.--(BUSINESS WIRE)--
Demand
Media, Inc. (NYSE:DMD), a diversified Internet company comprised of
several media and marketplace properties, announced today that it has
completed the sale of its Cracked business to The E. W. Scripps Company
(NYSE:SSP) for $39 million in cash.
The sale of Cracked positions Demand Media to further enhance the
quality of its products and improve the user experience on its
properties. The company’s platforms enable communities of creators to
reach passionate audiences in large and growing lifestyle categories
including health and nutrition (LIVESTRONG.com); DIY (eHow); living,
eating and fashion (LEAFtv); and art and design (Saatchi Art and
Society6).
“This transaction leaves Demand Media with a more focused portfolio of
businesses, significantly strengthens our balance sheet, and positions
us to drive profitable growth moving forward,” said Sean Moriarty, chief
executive officer of Demand Media. “Through Cracked's evolution it
became apparent that it would benefit long-term from joining a media
company with deep roots in the digital media landscape and a proven
strategy for leading the way in over-the-top audio and video. Scripps is
an outstanding organization and we believe the Cracked business and team
will be well served under their new ownership.”
Demand Media has helped drive growth for Cracked, a leading
digital-media humor brand, since acquiring the property in 2007. In
particular, Cracked’s video audience has grown substantially over that
time. Cracked currently has over 1 million YouTube subscribers and more
than 20 million monthly video views across YouTube and Facebook. Scripps
is a leader in building and growing news, information and entertainment
businesses. It owns and operates a portfolio of television, radio and
digital media brands. The sale of Cracked to Scripps represents the next
phase in Cracked’s growth trajectory.
Cracked has nearly 40 employees and generated revenue of approximately
$10.9 million in 2015. Demand Media acquired the Cracked property for
less than $1.0 million and expects to use its existing net operating
losses to offset the gain resulting from the sale of the Cracked
business.
About Demand Media
Demand Media, Inc. (NYSE: DMD) is a diversified Internet company that
builds platforms across its media (eHow, LIVESTRONG.com and LEAFtv) and
marketplace (Society6 and Saatchi Art) properties to enable communities
of creators to reach passionate audiences in large and growing lifestyle
categories. In addition, Demand Media’s content marketing solutions
(studioD) and diverse advertising offerings help advertisers find
innovative ways to engage with their customers. For more information
about Demand Media, visit www.demandmedia.com.
Cautionary Information Regarding Forward-Looking Statements
This press release contains forward-looking statements within the
meaning of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995, as amended. These forward-looking
statements involve risks and uncertainties regarding the company’s
future financial performance, and are based on current expectations,
estimates and projections about the company’s industry, financial
condition, operating performance and results of operations, including
certain assumptions related thereto. Statements containing words such as
guidance, may, believe, anticipate, expect, intend, plan, project,
projections, business outlook, and estimate or similar expressions
constitute forward-looking statements. Actual results may differ
materially from the results predicted, and reported results should not
be considered an indication of future performance. Potential risks and
uncertainties that could affect the company’s operating and financial
results include the inability to use the company’s existing net
operating losses to offset the gain on sale from selling the Cracked
business, as well as other risks and uncertainties that are described in
Demand Media’s annual report on Form 10-K for the fiscal year ending
December 31, 2015 filed with the Securities and Exchange Commission (http://www.sec.gov)
on March 1, 2016, as such risks and uncertainties are updated in Demand
Media’s annual and quarterly reports on Form 10-K and Form 10-Q filed
with the Securities and Exchange Commission, including, without
limitation, information under the captions Risk Factors and Management's
Discussion and Analysis of Financial Condition and Results of
Operations. The Company does not intend to revise or update the
information set forth in this press release, except as required by law,
and may not provide this type of information in the future.
View source version on businesswire.com: http://www.businesswire.com/news/home/20160412006681/en/
Source: Demand Media, Inc.