(AP) Media company E.W. Scripps Co. on Monday said it will spend $525 million in cash to acquire privately held Shopzilla.com, the latest deal on Wall Street to capitalize on the growing specialized Internet search business.
Scripps said it will buy 100 percent of the comparison shopping search engine. The deal also calls for Shopzilla shareholders to get the amount of its net working capital at the time of the closing, which is estimated at about $35 million.
The acquisition comes just days after eBay Inc. acquired Shopping.com, an online comparison shopping Web site, for $620 million in cash. Also last month, Web search engine Ask Jeeves Inc. agreed to be bought by Barry Diller’s IAC/InterActiveCorp in a $1.9 billion deal.
“Shopzilla is a significant Internet play for Scripps,” President and Chief Executive Kenneth W. Lowe said in a statement.
Los Angeles-based Shopzilla, formerly known as BizRate.com, will become a stand-alone operating unit of Scripps. The Web site has an index of more than 30 million products at 55,000 different stores, and helps shoppers find products for sale on the Internet.
The acquisition — which must still clear regulatory approval — is expected to be completed during the third quarter. Scripps believes it will be slightly dilutive to earnings per share in 2005 and accretive the following year.
Scripps expects the acquisition to generate $30 million to $33 million in segment profit on revenue of $130 million to $140 million this year.
Shopzilla, which attracted 14 million unique visitors during April, represents a significant expansion of the Scripps Internet business. Scripps already operates national and local online brands – including FoodNetwork.com, HGTV.com, DIYNetwork.com, fineliving.com, gactv.com and ShopatHomeTV.com.
Shares of Scripps fell 14 cents to close at $51.13 on the New York Stock Exchange. The stock has traded between $44.73 and $54.52 over the past year.