The rumors keep flying with the AdultFriendFinder deal we’ve been writing about (see update here).
No sale has yet been closed, but not due to a lack of a willing seller. We’ve gotten confirmation, from a new source, that their annual revenues are “over $300 million.” And we’re now hearing EBITDA numbers in the $100 million/year range. Penthouse seems to be the only serious bidder for the company, but they are clearly talking to a lot of potential buyers. They seem to be ready to sell for a little as $300 million, which suggests founder Andrew Conru wants out of the smut business, and fast.
hmmm….
A friend in need, is a friend INDEED
Michael… wouldn’t say he wants out of the smut business, just getting out of this particular niche. They’ve made their $$ and diversifying their business. Penthouse had lots of problems buying ibill.com last year so don’t think they’ll be purchasing AFF.
Last time I checked, Penthouse was losing $$ left and right and the ibill fiasco cost them customers overall.
Selling off businesses has become a trend today.. you establish some business, earn from it and then sell it at a premium price and start with something new.. great idea of business..
Based on those numbers…it looks like a real bargain - whoever the buyer is, is getting it at a steal
Maybe the new owner will make the site free?
At $300m, this would indeed be a steal.
3 times EBIDTA? Hell yeah!
The smut business trades at very low multiples.
everyone get rich, so they start to sell things that help them rich
I have bad feeling about this adult dating/mature content. Google Adsense most like banned techcrunch. :/
https://www.google.com/adsense/policies?hl=en_US
I also think Techcrunch is going write bad stuff about Google.
So I think its safe to say that facebook etc, are having or are expected to have an impact on these site bottom lines? Interesting times and man thats a boatload of cash monthly regardless if a sale or not! *Jealous*
Forgive me… I think Mike becoming new darth vader.
I used to be huge fan of techcrunch back 06′. But…. why show this adult content?
Are you going to join Facebook fan?
If the owner really thinks the business is worth $300m, why not go public?
That’s the same valuation that Playboy is getting with about $50m EBITD/year margin.
The numbers don’t add up.
Wouldn’t say AFF is all about smut because aside from the content, the business model is more like a LinkedIn/Facebook type. Wouldn’t say they were worth any where near FB because of the nature of the content but how many social networks are pulling in $100MM of income a year? I’d think they could carry at least a 7-10 times income valuation.
What a crock of shit. Adult Friend Finder, AKA Various Inc is not for sale, nor was it ever & this is all bullshit & lies invented by the lying idiots at TechCrunch
They (Lars and Andrew) have wanted out for a while, and they’ve made it no secret. Andrew has said so in many places including the interview for the CNN article earlier this year. Lars has said on places like GFY.com that he doesn’t like what he does and is continuing with it just to cash out. I suspect that whole idea of AFF’s acquisition of cams.com was to integrate it, get the numbers up with a short-term focus, and sell the combined company. Talks of a sale are therefore not surprising.
This might be a very good opportunity for private equity. If some very talented people could mainstream AFF in popular opinion so that it ends up being considered less as “smut” and more of a social network for sexually-liberated adults, you’d get access to a whole new market. And we know that when new customers are exposed to online adult sales pitches for the first time- when they are “porn virgins”- they tend to buy at high ratios. So there would seem to be strong potential income growth in cross-sales to these new members: things like newly-released DVDs, porn site memberships, sex toys, etc…
The crux of this all is mainstreaming the company as much as possible in popular opinion. A very talented marketing team might be able to pull that off.
If the earnings and valuation multiples are correct, I know some people who would love to put in a serious offer. How do I get in contact with Conru & Co.?
Is that really worth for $300 million?
If we dropped our hypocrisy about sex in this country, this would be a $10bn acquisition. AF is worth it, Facebook is not.
Ridiculous. They don’t “like what they do”. Does that mean they can’t stand what millions of Americans do every every day? What a bunch of hypocrites.
could not agree more
AF is one of the most successful, subscription-based models on the Net today.
Freeedom. Adultfriendfinder rocks. Long live the (drag) queens.
Yes, if the sell for $300m, by all accounting standards, this IS a steal.
Smut or not smut. $100mm net is a lot of $.
Anyone in their right mind would jump in at that valuation. Something’s fishy.
Take it from an insider:
The deal with Penthouse was in process since early in the year. It was supposed to be complete by September, but that’s now two months past. It may be that Conru screwed the deal and is now denying it was ever going to happen.
Lars Mapstead, owner of 10% of the company since Conru bought out his webcams site, said “There is no deal, currently,” in this AVN article on Nov 19th:
http://www.avn.com/index.cfm?o.....561D1B850F
This could be quite true, now, but there WAS going to be a deal with Marc Bell/Penthouse, at least as late as the end of August.
As for Conru wanting out, or trying to take the company public instead of selling it, see this article in the SJ Mercury from over a year ago:
http://www.azstarnet.com/business/155372
(The original article published in the print edition of the SJ Mercury had the title “Andrew Conru has a problem”)
Also see this article in Business 2.0 that was written before the deal with Marc Bell was going anywhere, especially at the end:
http://money.cnn.com/magazines...../index.htm
The inside scoop is that growth in the adult content industry (which is really what AFF is about) is stagnant compared to the rest of the tech industry. AFF’s numbers have been flattening out and that drives Conru just nuts. He’s got an ego the size of Canada and if anything happens or starts to happen to show that he isn’t on top of the game and the smartest guy in the room he just freaks out. What’s ironic is that he’s tied his ego so tightly to the profits of his company, when he doesn’t even know what to do with the money! He doesn’t have expensive tastes, he’s afraid of flying and he’s a workaholic so he doesn’t take vacations. Then with his personality it’s impossible to imagine him ever actually finding a woman, who he could potentially spend his money on, which was the whole point of why he got into online dating sites in the fist place.
Why would anyone want to sell such a profitable site for such a small amount of cash? It doesn’t make any sense. Maybe the guy just wants to retire or hesaw some alarming signs on the horizon? Is plentyoffish.com more profitable, long-term, because it’s free?
3 * ebitda sounds like they are selling a steel mill or a paper factory but not one of the best recognized internet niche sites. I guess the sell side M&A guys are crying their eyes out. Firstly there is stubstantial Ebitda and then they are only getting 3 times that if they are lucky.
You guys are worse than a bunch of old ladies talking about their grandkids. Does anyone have any real info or financial experience other than this B.S. weak ass “I heard from a friend of a friend”…
That’s a good chunk of money to spend on this website; thus their expenses should be lowered. Check out http://www.uniatelecom.com for solutions.
The issue here is the growth one. Adult Friend Finder is as big as it can get. It’s in all kinds of legislative danger and competitive danger (lots of free and less expensive sites out there with less annoying interfaces). AFF probably costs a fair amount to run.
Their offer is kind of tired. I don’t think the company is going anywhere good.
A good time to sell out.