APN outlays $36m for slice of e-commerce

APN News & Media paid $36 million for an 82% stake in the online retailer brandsExclusive, with a possible additional $30 million payable if brandsExclusive meets set earnings targets for the 2013 financial year.

brandsExclusive is an online retailer with about 1.8 million members that offers discounted premium clothing brands, accessories, shoes, toys, homewares and sporting goods through its website.

APN bought brandsExclusive as part of a push to bulk up its online presence, reposition for growth and ramp up digital earnings. APN’s chief development officer, Matt Crockett, said the company is increasing exposure to high‑growth media assets, particularly digital transactions and e‑commerce, which are the fastest growing parts of its media and digital marketing segments.

Yes. APN will pay a further $30 million if brandsExclusive meets set earnings targets for the 2013 financial year, meaning a portion of the deal is contingent on future performance.

brandsExclusive co‑founders Daniel Jarosch and Rolf Weber will continue to manage the company after the sale to APN.

The acquisition adds to APN’s existing online transactional businesses, which already include group buying site GrabOne, auction and classifieds site Sella, and sports tipping site Jimungo, expanding APN’s footprint in digital commerce and transactions.

The article notes that APN posted a loss of $45.1 million in 2011, and the purchase of brandsExclusive is part of its effort to reposition the company and grow its portfolio of digital ventures.

Everyday investors should watch whether brandsExclusive meets the 2013 earnings targets tied to the additional $30 million payment, monitor APN’s progress in growing digital earnings from its expanded e‑commerce assets, and keep an eye on updates about how the acquisition helps APN reposition for growth given its recent loss in 2011.