Scripps plans Shopzilla acquisition
7 June 2005
The EW Scripps Company has announced plans to purchase a leading comparison shopping website.
The company announced this week that it will pay $525 million in cash for 100 per cent of privately-held site Shopzilla, while shareholders will get Shopzilla's net working capital at the time of closing, estimated at about $35 million.
Cincinnati-based Scripps is a media company that owns newspapers, broadcast and cable TV networks. The acquisition announcement comes less than a week after eBay said it had agreed a deal to buy Shopping.com for $620 million in cash.
The Shopzilla deal, pending regulatory and other approval, is expected to be completed later on this year. Scripps warned that the deal would slightly affect earnings per share in 2005, but would boost 2006 earnings. The deal will be financed using a combination of borrowing under the company's commercial paper program and the sale of previously registered debt securities.
Founded in 1996, Shopzilla aggregates and organises information on more than 30 million products from 55,000 retailers and will remain a stand-alone operating unit of Scripps following the deal.
The comparison shopping market is growing rapidly and many large media and internet companies are turning their attention to the expanding online sector.
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