ClickZ, which Jupitermedia had purchased for nearly $20 million USD, and the Search Engine Strategies trade shows, went to UK-based Incisive Media for $43 million.
The price seems a bit low. 2004 revenues from the units nearly hit $40 million, according to MediaDailyNews. Investors certainly didn’t care for the sale price, as they pushed Jupitermedia shares down after the announcement, and even further when the company announced weak growth in its images business.
That images business is supposed to be Jupitermedia’s new focus, with CEO Alan Meckler noting in a blog that they are an “Imaging company with media.”
Was there an urgency to this sale? Jupitermedia did not respond to additional questions about the deal, and its advisory firm, the Jordan, Edmiston Group, had no comment on that either. (UPDATE: Mr. Meckler did respond after this story initially went online. His answer to the question on urgency was an emphatic NO, and that the company began discussing the sale in May.)
Jupitermedia stock had been down for much of the year, until a recent run-up in the past couple of weeks. Yesterday the stock closed down $3.03 to $19.74. In 2004, the company went through over $36 million in cash spent on acquisitions, according to Reuters.
The sales of ClickZ and SES could be more fuel for the acquisition fire. The cash deal gives Jupitermedia more funds to play with, as well as laying off the costs of the SES trade shows from its books. In 2004, the company had net income of $15.7 million on revenues of $71.8 million; it cost Jupitermedia a lot to earn that income.
Maybe the cost of SES going forward was just too much for Jupitermedia to bear. An upturn in the company’s imaging business will have investors saying “Danny who?” with enough of an increase on their investments.
David Utter is a staff writer for Murdok covering technology and business. Email him here.
