NBC Universal to Acquire iVillage for $41.50 Per Unique User (GE, IVIL, V)

NBC Universal, 80% owned by GE and 20% by Vivendi Universal, announced that it will acquire online women's media company iVillage for about $600 million, according to the WSJ (paid sub req'd). The buyout price is $8.50 per share, compared to IVIL's closing price Friday of $7.98.

Quoted in the WSJ, GE Vice Chairman Bob Wright said that "acquiring iVillage will enable us to bring our programming to a large and passionate online community... We look forward to … giving our advertising clients new and exciting ways to reach a valuable demographic." The WSJ commented that "NBC Universal said it envisions iVillage as the "centerpiece" of its digital strategy and expects to grow its digital revenue to about $200 million in 2006, including iVillage."

iVillage reported strong Q4 2005 results on February 13th (press release, full iVillage Q4 conference call transcript). Revenue of $30.1 million was up 65% year over year and net income was $8.8 million.

Valuing the deal:

• iVillage had 77.4 million shares outstanding at end-2005. At $8.50 per share, that values the deal at about $658 million. But iVillage has $55.9 million in cash and cash equivalents and no debt on its balance sheet. So NBC Universal is effectively paying about $602 million for iVillage.
• iVillage's guidance for full-year 2006 was revenue of $105-113 million (mid-point $109 million), EBITDA of $24-29 million (mid-point $26.5 million) and net income of $13.8-18.8 million (mid-point $16.3 million). That values the deal at about 6 times forward revenues, 23 times forward EBITDA and 37 times forward net income.
• According to comScore Media Metrix, iVillage had 14.5 million unique monthly visitors in January. That values the deal at $41.50 per unique user.