Future strategic focus on digital transaction business models, especially in the travel sector
TOMORROW FOCUS AG (Munich, Germany) signed an agreement with Burda Digital GmbH today covering the sale of TOMORROW FOCUS Publishing GmbH, which is home to the TOMORROW FOCUS Group’s publishing activities including the news portal FOCUS Online; the German-language edition of The Huffington Post, a news portal and platform for blogs; the finance and stock market information portal Finanzen100; the parent portal NetMoms; and TOMORROW FOCUS Media, which specialises in digital marketing.
The decision to sell the Group’s advertising-based operations will allow TOMORROW FOCUS AG to concentrate on digital, transaction-based business models, especially in the travel sector. The objective is to further expand the Group’s market position as one of Europe’s leading providers in the field of hotel ratings and travel bookings. At the same time, TOMORROW FOCUS AG will examine the potential for speeding up growth in the Subscription segment with its high-profile brands ElitePartner and jameda, and the recent start-up organize.me. One such option under consideration involves inviting strategic partners to acquire a stake in the companies that make up the segment. TOMORROW FOCUS AG will explain its future strategy in detail at its Capital Markets Day, which is scheduled for the end of May 2015.
The agreed purchase price is EUR 30.2 million. This valuation is equivalent to 8.6 times the 2014 EBITDA of TOMORROW FOCUS Publishing GmbH. According to initial estimates (based on carrying values as at 31 December 2014), the resulting book profit under IFRS rules will be at least EUR 20 million. The single-entity financial statements of TOMORROW FOCUS AG under the German Commercial Code (Handelsgesetzbuch, HGB) will show a book profit of EUR 3.1 million. The sale is subject to a number of conditions precedent but should be completed in the second quarter of 2015.
The cash inflow will be used to pay off a bonded loan of EUR 14.5 million that is due to mature in 2016 and to generate further growth in the Travel segment. In financial 2014, the companies that will be sold contributed EUR 29.7 million to the Group’s total revenue and EUR 3.5 million to consolidated EBITDA.
Burda Digital GmbH will take over all publishing assets and the digital marketing specialist with all employees. They will be integrated into its National Digital Brands division. It is intended that the journalistic units and the digital marketing specialist, TOMORROW FOCUS Media, will continue to be managed independently by existing staff.
According to Toon Bouten, Chief Executive Officer of TOMORROW FOCUS AG, “The sale makes good sense for all concerned, and it leaves the company with a clearer focus. Our hotel rating and travel portals, HolidayCheck and Zoover, give us a strong market position in the travel sector with excellent prospects for expansion in one of the Internet’s most important and largest growth markets. We are also planning a big drive to expand ElitePartner, jameda and organize.me in collaboration with strategic partners. At the same time, Burda’s decision to embed TOMORROW FOCUS Publishing in its national digital operations opens up new prospects and opportunities for those successful brands and their employees.”
About TOMORROW FOCUS AG
TOMORROW FOCUS AG (ISIN DE005495329) is based in Munich, Germany, and is one of the leading exchange-listed Internet groups in Germany. The Group has a workforce of around 750, and its business operations are divided into three segments: Travel, Publishing and Subscription.
The Travel segment includes HOLIDAYCHECK AG, which operates a number of hotel review and travel booking portals by the same name; the travel division of WEBASSETS B.V., which operates the ZOOVER hotel review portals; and TOMORROW TRAVEL B.V., which operates the Dutch online travel agent TJINGO.
The Subscription segment is made up of ELITEMEDIANET GmbH, which operates the premium online dating agency ELITEPARTNER.de; JAMEDA GmbH, which operates the physician rating portal JAMEDA.de; and ORGANIZE.ME GmbH, which operates an app-based document organisation and reminder system.
The Publishing segment includes TOMORROW FOCUS Publishing GmbH with the subsidiaries TOMORROW FOCUS Media GmbH (one of Germany’s leading digital marketing providers) and TOMORROW FOCUS News+ GmbH, which operates a number of Internet portals such as the news journalism and utility site FOCUS Online; the news portal and platform for views THE HUFFINGTON POST; the stock market information portal FINANZEN100; and the parent portal NETMOMS; and the meteorological arm of WEBASSETS B.V., which operates the METEOVISTA and WEERONLINE weather portals.