Trade Me says it’s selling daily deal site Treat Me for an undisclosed amount, in a management buy out led by Treat Me head James MacAvoy.
The auction giant will divest 100 percent of its stake in the two-year-old subsidiary over the next month, selling the assets to MacAvoy’s consortium of buyers.
MacAvoy was the co-founder of online movie rental company Movieshack, which was acquired by Sky TV in 2008 and merged into Fatso.
Trade Me chief executive Jon Macdonald says Treat Me wasn’t given the support it needed by a company with a lot on its plate already.
“We’ve not been able to give Treat Me sufficient oxygen, mainly because of the bigger opportunities ahead of us in the core areas of our business,” he says.
Macdonald says the sale amount is confidential, but “not considered material”, i.e not substantial for Trade Me which reported a half-year net profit of $37.4 million earlier this year.
According to the same half-year report, Treat Me has had a year-on-year revenue growth of 32 percent. At the time Trade Me said the daily deals industry was facing challenges, but the company valued having a presence in the sector while it developed.
Daily deals sites were fashion du jour in 2010 and 2011, led by Groupon in the States. At one point the company was valued at US$13 billion, this proved to be an unsustainable valuation and by the end of last year the company’s worth dipped to US$1 billion. Last week Groupon fired its chief executive Andrew Mason.