Retail
Blucora to acquire e-retailer Monoprice for $180 million
By Seattle Business Magazine August 1, 2013
Blucora announced today it has agreed to purchase electronics e-retailer Monoprice for $180 million. The company also announced its revenue in the second quarter climbed 16 percent from the year before to $117 million.
Monoprice is a rapidly growing online provider of self-branded electronics and accessories, with a product catalog exceeding 5,000 items across multiple categories such as audio/video cables, networking, mobile accessories, wall mounts and home video.
This acquisition represents the third leg of Blucoras move into growth sectors on the internet. Revenues from its tax preparation business, the result of its acquisition last year of TaxAct, shot up 19 percent in the quarter. Revenues from its original Infospace search business, which aggregates search results from Google, Yahoo and others for 100 client Internet companies, climbed 16 percent. However, overall net income in the quarter fell 13 percent from the year before to $8.4 million.
Monoprice adds another growth company to Blucoras portfolio and brings exposure to online retail where global shoppers continue to migrate. Blucora has pursued a policy of acquiring profitable companies, in part to take advantage of massive losses it has on its books dating back to the dotcom bust.
Here’s the press release:
BELLEVUE, Wash. August 1, 2013 Blucora, Inc. (NASDAQ:BCOR) today announced that it has entered into a definitive agreement to acquire Monoprice, a rapidly growing online provider of self-branded consumer electronics and accessories. The all-cash transaction, valued at $180 million, is subject to satisfaction of customary closing conditions and is expected to close in the third quarter of 2013.
Founded in 2002, Monoprice delivers premium quality products at prices substantially below the famous brands by leveraging direct sourcing relationships and selling directly at monoprice.com. The Company offers thousands of Monoprice-branded items on its website, with top-tier service, and rapid product delivery.
We are pleased to welcome Monoprice to the Blucora portfolio said William J. Ruckelshaus, President and Chief Executive Officer of Blucora. Monoprice is a disruptive participant in large markets for electronics and tech accessories where purchasing is rapidly moving online. The Company has deeply loyal customers and significant runway ahead. We are tremendously impressed with the Monoprice team and excited about our future together.
The acquisition is expected to be immediately accretive to Blucora earnings per share and represents an attractive return on shareholder capital. For the twelve months ending June 30, 2013, Monoprice generated revenues of $131.1 million, and adjusted EBITDA of $16.0 million. Blucora expects to fund the transaction with cash on hand. Upon completion of the acquisition, Monoprice will become a wholly-owned subsidiary of Blucora, and will continue operations in Rancho Cucamonga, California, as a standalone business unit led by the Monoprice management team.
Since Monoprices founding, we have strategically expanded into higher growth and higher margin product categories without losing focus on our mission to deliver the best quality products at the lowest price, said Monoprice CEO Ajay Kumar. Blucora brings decades of experience managing and investing in digitally-enabled businesses. We believe this combination will help elevate the Monoprice business into a mainstream consumer brand. This opportunity secures a bright future for Monoprice and I look forward to being a part of it as we work towards a quick and seamless transition.
Conference Call
As previously announced, Blucora will discuss the acquisition with members of the investment community during the company’s second quarter 2013 earnings conference call today, Thursday, August 1 at 5:30 a.m. Pacific time (8:30 a.m. Eastern time). This call will be webcast and can be accessed within the Investor Relations section of the Blucora corporate website at https://www.blucora.com.
About BlucoraTM
Blucora operates two leading Internet businesses. Our InfoSpace business provides online search and monetization solutions to a network of more than 100 partners globally. Through TaxACT, we provide online tax preparation solutions to consumers and professional preparers. The Blucora team brings decades of experience operating and investing in digitally-enabled businesses. More information about Blucora may be found at www.blucora.com. Follow and subscribe to us on Twitter, LinkedIn and YouTube.
About Monoprice, Inc. (DBA Monoprice.com)
Based in Rancho Cucamonga, CA, Monoprice, Inc. is an e-commerce leader specializing in high-quality yet affordable consumer electronics and tech products, including a wide variety of cables, home theater equipment, networking and IT gear, mobile accessories, PC and gaming accessories, and pro audio equipment. Established in 2002, Monoprice offers over 5,000 of its own branded products via its website www.Monoprice.com. The company has built its stellar brand reputation upon customer word of mouth, the consistent ability to deliver premium quality products at prices far below other national brands, and unmatched customer service. Monoprice was named an Inc. 500 company in 2008, 2009 & 2010, and an Inc. 5000 company in 2011. More information about Monoprice may be found atwww.Monoprice.com. Follow us on Facebook, Twitter, LinkedIn, Google+, Spiceworks, and YouTube.
Blucora Reports Strong Second Quarter Results
Company Announces $180 million Acquisition of Monoprice
BELLEVUE, Wash., August 1, 2013 (BUSINESS WIRE) — Blucora, Inc. (NASDAQ: BCOR) today announced financial results for the second quarter ended June 30, 2013.
We are pleased to announce solid results across both of our businesses in the first half of 2013, said Bill Ruckelshaus, President and Chief Executive Officer of Blucora. InfoSpace continues to expand its distribution network and drive growth with existing partners. TaxACT recorded market share gains in tax year 2012 with enhanced core offerings and new services complementary to the filing process.
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Summary Financial Performance: 2Q 2013 ($ in millions except per share amounts) |
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Q2 2013 |
Q2 2012 |
Growth |
|
|
Revenues |
$117.2 |
$100.9 |
16% |
|
Search |
$ 94.5 |
$81.8 |
16% |
|
Tax Preparation |
$ 22.7 |
$ 19.1 |
19% |
|
Adjusted EBITDA |
$29.2 |
$24.5 |
19% |
|
Non-GAAP Net Income |
$24.6 |
$21.8 |
13% |
|
Non-GAAP Diluted EPS |
$0.58 |
$0.53 |
9% |
|
Net Income |
$8.4(1) |
$9.7(2) |
-13% |
|
GAAP Diluted EPS |
$0.20(1) |
$0.23 |
-13% |
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(1) Includes $2.3 million non-cash loss on derivative instrument. (2) Includes $0.3 million non-cash gain on derivative instrument.
See reconciliation of non-GAAP to GAAP measures below. |
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Segment Information
Search
Segment revenue for the second quarter of 2013 reflects strong growth from search distribution and in our owned and operated properties, up 12 percent and 46 percent, respectively, over the second quarter of 2012. Segment income for the second quarter of 2013 was $17.9 million, up 19 percent over the second quarter of 2012.
Tax Preparation
Segment income for the second quarter of 2013 was $14.4 million, up 21 percent over the second quarter of 2012, reflecting a strong end to the tax season.
Corporate Operating Expenses
Unallocated corporate operating expenses for the second quarter of 2013 were $3.1 million.
Monoprice Acquisition
Today, the Company announced that it has entered into a definitive agreement to acquire Monoprice, a rapidly growing online provider of self-branded consumer electronics and accessories. The all-cash transaction, valued at $180 million, is subject to satisfaction of customary closing conditions and is expected to close in the third quarter of 2013. For further information, see the acquisition press release issued by the Company today.
Third Quarter Outlook
For the third quarter of 2013, the Company expects revenues to be between $93.5 million and $97.5 million, Adjusted EBITDA to be between $10.0 million and $11.5 million, Non-GAAP Net Income to be between $6.0 million and $7.4 million, or $0.14 to $0.17 per diluted share, and Net Loss to be between $1.8 million and $800 thousand, or $(0.04) to $(0.02) per share. The Company’s forward-looking guidance does not reflect the operating results of the Monoprice acquisition nor potential gains or losses from derivative instruments.