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Scripps Sold uSwitch For Only $10 Million, 3 Years After Buying It For $366 million

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Late last year when Scripps Networks Interactive (NYSE: SNI) finally announced the sale of its UK utility comparison shopping site uSwitch, we knew it was for a lowball price, and we guessed around $50 million, three years after it bought the site for $366 million. Turns out Forward Internet Group, who bought the company, paid a lot less than that. According to Scripps’ 10K that came out earlier this evening, the cash portion of sale price is about $10 million.

That’s the topline number, but there are some other nuances to it: “The gain on the uSwitch divestiture reflects the recognition of $44.4 million in foreign currency translation gains that were previously recognized in equity as a component of accumulated other comprehensive income. The foreign currency translation gain was partially offset by a $6.8 million charge recorded for lease obligations we assumed in the sale and a $8.9 million loss that was recognized on the sale of uSwitch’s net assets.” In 2007, Scripps took a non-cash charge of $411 million to write-down uSwitch’s goodwill and intangible assets.

SEE ALSO: Scripps Networks Finally Finds A Buyer For uSwitch: UK Group Forward; CEO Leaving

Meanwhile, uSwitch’s revenue numbers paint a grim picture, reflecting the final sale price, as evidenced by the drastic drop in 2009 numbers in the chart below (click on it to get the full chart):

Meanwhile, its other big interactive service Shopzilla isn’t doing that well either: in 2009 its operating revenues dropped 27.1 percent to $173.92 million, from $238.5 million in 2008. The profits for it were down by half, to $30.73 million, compared to $62.53 million in 2008. Here’s how Scripps explains the drop: “Interactive Services’ results in 2009 compared with 2008 have been affected by the downturn in the economy, a less favorable sponsored-link contract with Google and the decision to competitively reposition Shopzilla for long-term growth. Reduced spending by customers resulted in lower volume and cost per click prices during the year. As a result of the repositioning, we are foregoing near-term margin with the underlying intention of engaging consumers more deeply in the product.”

Mar 1, 2010 11:06 PM ET

Uswitch


Posted In: Money, M&A & Venture Capital, Mergers & Acquisitions, Companies, Scripps, Scripps Networks Interactive, uswitch

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