AOL Inc will buy Arianna Huffington’s influential website for $315 million, looking to the high-profile liberal pundit to rescue it from the dustbin of Internet history.
The move comes at a hefty premium. AOL is estimated to pay 32 times earnings before interest, taxes, depreciation and amortization for the Huffington Post, said Benchmark Co analyst Clayton Moran.
Similar content deals, such as Hellman & Friedman’s acquisition of Internet Brands in September 2010, typically go for eight to 12 times earnings, said Moran.
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“AOL just spent 40 percent of their cash for very little near-term return,” said Moran.The deal, which sent AOL shares up slightly after they fell as much as 4 percent in morning trade on Monday, will create a media group that will have a combined base of 117 million visitors a month in the United States, and reach 270 million people globally, AOL said in a statement.
Arianna Huffington, co-founder of The Huffington Post, will lead a newly formed The Huffington Post Media Group, which will integrate all Huffington Post and AOL content, as its president and editor-in-chief.
Read More: Reuters