Daily-deals company Groupon has announced that it will receive a significant assist from Comcast.
Groupon is set to receive a $250 million investment from independent private investment company Atairos, which focuses on growth-oriented businesses. Atairos CEO Michael Angelakis is set to join Groupon’s Board of Directors as part of the arrangement, writes Edward C. Baig for USA Today.
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Comcast-backed company to plow $250 million into Groupon
Angelakis used to work as Vice Chairman and Chief Financial Officer at Comcast, which will now work with Groupon in order to identify “strategic partnership opportunities.”
“The potential in combining Groupon’s local expertise with Comcast’s vast subscriber and advertiser network is something we look forward to closely exploring together,” Comcast Cable President and CEO Neil Smit said.
Atairos only launched a few months ago, and counts on $4 billion in capital from Comcast. Groupon will use some of the $250 million to buy back stock, approving a $200 million increase to its existing share repurchase program. That program has now been extended to April 2018.
Recent turmoil at Groupon did not discourage investment
Shares in the company were up 1% on Tuesday following a 9% surge on Monday. The price reached $4.29 after the deal was announced.
Groupon floated in November 2011, becoming the largest IPO by a U.S. internet company since Google. However the company has struggled ever since, and laid off 1,100 people last September. That number represented 10% of its total workforce, and led to the shutting of operations in 7 countries.
Last November co-founder Eric Lefkofsky stepped down as CEO to become Board Chairman, replaced by Rich Williams. Williams had not spent long at the helm before Chinese e-commerce giant Alibabe bought over 32 million shares in the company.
“Groupon is an established leader in connecting customers with local businesses,” continued Smit. The company has struggled in recent years but executives apparently still see great potential in the daily-deals company.
Comcast is the largest cable operator in the United States, and the deal brings it together with a company that is trying to become a broader online marketplace. Comcast may be hoping to drive growth during a time that the pay-TV industry is in a state of flux due to the challenge of streaming services such as Netflix.