Daily Candy Goes On Auction Block; $100 Million Or So Tossed Around As Price

DailyCandy Inc., purveyor of trends and deals via email and web, is being auctioned off in what the WSJ portrays as both a litmus test of internet property values and a shot at public redemption for Bob Pittman. The former AOLTW COO is described in the article as “a fall guy for the disastrous merger between America Online and Time Warner Inc.” who “faded into obscurity after resigning from the company in 2002.” That $100 million-plus figure between tossed around reads like it comes from someone involved in the sale — ie “people familiar with the matter say.” Either the same or different people familiar with the deal tell the Journal the company has margins of almost 60 percent and “the hope for 2006″ is revenue less than $20 million with pre-EBITDA earnings in the low-teen millions.
Pittman acquired controlling interest in DailyCandy in late 2003 for about $3.5 million; Dany Levy Shapiro, who founded the company in 2000 and remains as chairman, kept about 20 percent. The sale was to be the beginning of the next phase for DailyCandy, which needed to expand beyond daily emails covering several markets. Pittman, who founded his investment fund Pilot Group LP earlier that year, wanted to transform the company into a multimedia player and extend the brand. Today DailyCandy has nine daily editions, including one in London, and two weekly. Atlanta is supposed to be the next market for a daily. A branded book is due in April and editors make frequent TV appearances and there’s a content deal with Amazon.
Is it worth $100 million? Well, maybe to the right buyer, who sees how to accomplish what hasn’t happened since Pittman’s investment and to get the most out of its geographic potential. If the books show the numbers in the story it could support $80-100 million. The Journal says people fear “that all the best Web properties have been snapped up. The remaining buyers may be paying top dollar for marginal properties.” I have no idea who these unidentified people are but I do know they’re looking at a different web landscape than the one we cover.
Update: My delayed reaction — someone needs to take the needle out of his or her arm. This is a great way to try to set an inflated price — get the Journal to do it for you.Related: Bob Pittman Buys DailyCandy

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