Liberty Interactive Corp. sold Backcountry.com for $350 million, or 11 times what the online retailer is expected to generate this year in operating income depreciation and amortization, the CEO for its former parent company disclosed Wednesday.
“We completed an attractive sale of Backcountry.com at the end of the second quarter on 30th of June,” said Greg Maffei, president and CEO for Liberty Interactive Corp. “This resulted in a book gain of $105 million. Our total consideration in that transaction was approximately $350 million, which is an implied multiple of over 11 times the enterprise value versus the forecast 2015 adjusted OIBDA. So we consider that a pretty attractive sale.”
Liberty Interactive announced July 1 that it had sold Backcountry.com to the private equity firm TSG Consumer Partners LLC, but had not disclosed terms of the deal.
In its second quarter filing with the Securities & Exchange Commission, Liberty Interactive goes on to disclose that Backcountry.com lost $4 million on sales of $105 million in the second quarter ended June 30, 2015, compared with a loss of $3 million on sales of $99 million in the second quarter of 2014.
Losses reached $3 million on sales of $227 million in the six months ended June 30, 2015, compared with a loss of $4 million on sales of $211 million in the first half of 2014, according to the filing.
Based on the 11 times OIBDA figure quoted by Maffei, that implies Backcountry will earn OIBDA of nearly $35 million in the back half of the year. Backcountry makes most its profits in the fourth quarter when outdoor enthusiasts flock to its site to purchase winter gear.
Liberty Interactive had never disclosed Backcountry.com's quarterly financial results, but broke out the results in a regulatory filing Wednesday to show investors how the remaining businesses at its Digital Commerce companies fared in the quarter.
Those businesses generated sales of $149 million in the second quarter, up 7 percent from a year earlier. Liberty Interactive reported Bodybuilding.com, where sales grew $5 million, and CommerceHub, where sales grew $6 million, accounted for the most growth. The Digital Commerce segment also includes Evite and Right Start.
The increase in Bodybuilding.com revenue was attributed primarily to increased order volume on slightly lower average ticket. Average order values declined in part due to the impact of the strong dollar on sales to overseas customers.
Growth at CommerceHub, which manages drop ship programs for many consumer products manufacturers, was attributed primarily to an acquisition during the first quarter of 2015 and growth in active customers (vendors and suppliers) which increased the number of aggregate transactions processed through the CommerceHub platform.
Adjusted OIBDA for the continuing Digital Commerce companies increased $2 million year-over-year in the second quarter. Adjusted OIBDA as a percentage of revenue was relatively flat, representing 12.1 percent of revenue in the second quarter of 2015, as compared to 11.5 percent of revenue in the second quarter of 2014.
Operating loss for the continuing Digital Commerce companies was $3 million in the second quarter as compared to a loss of $9 million in the same period in 2014.