Groupon Inc. (NASDAQ: GPRN) shares saw a solid gain during Monday’s regular trading session, following news of a sizable investment from a private firm. The coupon giant announced it has entered into an agreement for a $250 million investment from Atairos.
As a stipulation with this investment, Michael Angelakis, chairman and CEO of Atairos, will join Groupon’s board of directors.
Earlier this year, Atairos was launched with more than $4 billion in committed capital and it is led by Angelakis, former vice chairman and chief financial officer of Comcast Corp. (NASDAQ: CMCSA). Also as part of the relationship, Comcast will work with Groupon to identify and implement potential strategic partnership opportunities.
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In terms of the $250 million investment, Groupon intends to use to proceeds for general corporate purposes, including the repurchase of its stock. In fact, the board of directors has just granted a $200 million increase in the current share repurchase plan. The company has a market cap of $2.5 billion.
Rich Williams, CEO of Groupon, commented:
Our partnership with Atairos will help accelerate our transformation while better positioning us to execute on our strategy and mission to build the daily habit in local commerce — which we continued to make progress on in the first quarter. I am extremely pleased that a respected, long-term oriented partner like Atairos shares our view about the vast opportunity ahead for Groupon.
Angelakis added:
We are excited to be partnering with Groupon, the undisputed global leader in hyper-local commerce with nearly 50 million active customers. Since creating the market in 2008, Groupon has redefined local commerce by increasing consumer buying power and changing the way businesses attract customers using modern mobile technology. We look forward to working closely with Groupon’s Board and management team as they pursue their strategic growth objectives.
Shares of Groupon were trading up over 10% at $4.33 Monday afternoon, with a consensus analyst price target of $3.59 and a 52-week trading range of $2.15 to $7.54.
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