Boston, MA 01/08/2013 (wallstreetpr) – Groupon Inc (NASDAQ:GRPN) has embarked on an aggressive acquisition strategy in the last six months. Acquisitions can help the company grow inorganically by adding either suppliers or customers; lead to synergies in operations or even blunt competition but on the downside can hurt a company if cash flows are not factored in.
Groupon operates an e-commerce platform by connecting merchants to customers. The company has a global presence though North America consisting of the U.S. and Canada contribute a major amount to its revenues and profits. The deals are targeted looking at the local and personal preferences. Groupon was also able to transform from a mainly desktop website to a mobile application. This turned out to be very important as user trends have changed rapidly from PCs to smartphones and tablets.
Groupon and its acquisitions
Groupon appears to have factored in all the issues before embarking on its acquisitions. Groupon Inc (NASDAQ:GRPN) acquired travel app Blink as well as SideTour. In this month, it also announced the acquisition of Korean daily deals site Ticket Monster from LivingSocial. The deal valued at $260 million was financed through a cash component of $100 million and a stock offering of the balance $160 million. LivingSocial has been facing financial difficulties of its own and the deal came at a very opportunate time for the company.
Groupon has transformed itself in the last one year and has added more merchants and subscribers to its network apart from the offerings. The acquisitions have helped the company to boost the range of deals apart from enhancing its geographic reach.
LivingSocial to liquidate its position
Though the deal is only some weeks old, LivingSocial is going to liquidate the stock holding in Groupon Inc (NASDAQ:GRPN), that it acquired as a result of the sale of Ticket Monster. The stock represents almost 2% of Groupon’s total outstanding shares and has been priced at $11.80 per share. This was expected given the fragile situation of LivingSocial, the proceeds of $163 million expected will go a long way to fund stability of its core business.
Analysts and investors have a positive sentiment about Groupon Inc (NASDAQ:GRPN).
