23rd May 2011. Group buying website CatchOfTheDay (which also owns Scoopon) has sold a 40% stake in the company for A$80m to a group of investors lead by billionaire James Packer, despite an ongoing legal battle with rival Groupon, which last year turned down a $6 billion takeover offer from Google. The investors include James Packer’s Consolidated Press Holdings, Seek co-founder Andrew Bassat and American hedge fund Tiger Global.
Currently Catch of the Day, which incorporates the Scoopon group-buying site, is turning over about $100 million and is five years old. It has 150,000 unique visitors a day.
The investment is the latest in a long list in the group buying market, including Spreets, Jump On It and Cudo. This is only the most recent of several digital investments led by media companies and buyers including Nine, Deals Direct and a number of international venture capital firms.
The deal comes a few weeks after Packer’s private equity fund, Ellerston Capital, put a reported $10 million into another Australian independent online retailer, Deals Direct.
Famous for the One.Tel investment that went sour, Packer has had an impressive set on wins in digital media. Publishing & Broadcasting Limited bought a 25% stake in online recruitment firm Seek in August 2003 for $33 million, selling out six years later for $440 million. It also invested $100 million across 2005 and 2006 into CarSales.com, which was sold by Nine Entertainment Company (the renamed PBL) for $562 million. He also invested $20m into PC Tools, which was sold by Simon Clausen to security giant Symantec in 2008 for $300 million. Packer made a reported profit of $40 million on this investment.
Brothers Gabby and Hezi Leibovich, founders of CatchOfTheDay, will retain a controlling interest in the company, which now has a valuation of $200 million based on the investment, with Tiger’s Lee Fixel and Seek’s Jason Lenga joining the board.
“Unlike many other players in the market, the team’s proven experience in building profitable e-commerce businesses means they have the skills, supplier networks and economies of scale to keep growing and leading the market,” said Packer in a statement.
James Packer’s media investment firm, Consolidated Press Holdings, teamed up with Andrew Bassat, CEO of Seek, and Glenn Poswell, founder of Gannet Capital, along with Tiger Global Management to acquire the $80 million stake.
“It is still early days in Australia when it comes to online retail and to support our next phase of growth we were open to overseas investors who could share a different perspective into the online retail market, as well as bring new skills, advice and contacts to further our growth and expansion,” said Gabby Leibovich.
Billionaire James Packer’s rumoured buy-in to an Australian coupon site may come with an unpleasant sideshow – a nasty legal battle that could test the laws over cyber-squatting.
The site, established by Melbourne-based brothers Gabby and Hezi Leibovich, is currently embroiled in legal action in the United States and Australia with American coupon giant Groupon. Groupon was unable to launch in Australia under its US brand name after Mason discovered that the Leibovich brothers had registered the Groupon.com.au website before Groupon decided to do so.
“Scoopon refuses to bow to the US giant’s attempt at trying to bully it out of the Australian market.”
Despite not having access to the Groupon.com.au domain name, Groupon launched in Australia with the name of Stardeals.com.au.