LivingSocial Inc. on Tuesday announced the sale of its Southeast Asia businesses to Singapore-based iBuy Group for $18.5 million, marking a further pullback from its overseas acquisition frenzy of three years ago.
The deal will see LivingSocial offload its operations in Thailand, the Philippines and Indonesia — markets it entered through its 2011 acquisition of Ensogo— as well as Malaysia.
At the time of the Ensogo purchase, LivingSocial and rival Groupon Inc. were in the midst of a venture-fueled battle for primacy as top daily deal provider. That battle quickly became an international one, with each company racing to scoop up daily deal startups overseas. But the appetite for daily deals waned everywhere, forcing an unprofitable LivingSocial to search for a new model, as well as to rethink much of its international presence.
The Southeast Asia business, which had moved into selling consumer products, "just wasn't an area of focus for us," Chief Financial Officer John Bax told me in an interview Tuesday. "That business had diverged a lot from what LivingSocial is."
The D.C.-based deals company in January completed the sale of its Korean business, Ticket Monster, to competitor Groupon Inc. for $260 million in cash and stock. Ticket Monster employed roughly 1,000 at the time of the sale, while LivingSocial counts a little more than 500 staffers in its Southeast Asia ops, Bax said.
LivingSocial has never disclosed the purchase price of Ensogo. Bax declined to name that original purchase price, or say whether it was higher or lower than $18.5 million.
"We think this is a great deal, and we're thrilled with the outcome," he said.
Explaining why one business sold for about 14 times the price of the other, Bax said: "Ticket Monster had dramatically higher revenues and dramatically higher sales, and Korea is a more advanced market."
The sale brings LivingSocial's total headcount to 2,154 employees, according to Bax. The company posted a $183 million net loss in 2013 on $399 million revenue.
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