In a deal that brings together two rivals in the daily deals space, Groupon has purchased LivingSocial unit TicketMonster for $260 million.
Groupon announced the deal in a press release reporting its third-quarter results. The company is paying about $100 million in cash plus $160 million in Class A common stock.
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"Ticket Monster is a great fit for Groupon," Groupon CEO Eric Lefkofsky said in the release. "The team shares our vision, already leveraging a truly mobile marketplace as well as one that has little reliance on email. TicketMonster is one of Korea’s most recognized and trusted brands, and we’re thrilled to have them join the family."
The deal, which is expected to close next year, also means that LivingSocial will become a Groupon stockholder.
LivingSocial bought TicketMonster in 2011 for an undisclosed sum. The company had been trying to sell the unit since late last year, according to reports. TMon, as it's known, has more than $800 million in annualized billings. It is to believed to receive about 10% of that in revenues.
LivingSocial posted revenues of $384 million for the first nine months of this year, almost exactly the same figure in the comparable period in 2012.
In LivingSocial's release on the deal, CEO Tim O’Shaughnessy referred to the unit as a "non-core asset" that doesn't match the company's strategic direction. "This sale will enable us to invest more aggressively in our marketplace innovation, product development and marketing in the US and other regions in which we operate," he said in the release.
Image: Getty/Scott Olson