Scripps shedding Shopzilla

Lifestyle media giant finds new partner for online business

Scripps Networks Interactive: SNI on NYSE

52-week range: $39.36-$53.66

Knoxville-based Scripps Networks Interactive has reached an agreement to sell its online comparison shopping business Shopzilla to a California-based private equity firm for $165 million.

Symphony Technology Group will buy all Shopzilla shares for $150 million cash due at closing of the deal and $15 million in deferred payments. The deal is expected to close around May 31.

"While we believe that Shopzilla has strong growth potential in the online retail space, its mission and future trajectory diverge from SNI's focus on lifestyle media brands," Joseph G. NeCastro, chief financial and administrative officer for Scripps Networks Interactive, said Friday in a statement. "The best way to create the most value for both parties was for Shopzilla to find a new partner and for SNI to continue to focus on its core. We believe STG will be a strong partner and will enable Shopzilla to accelerate its growth."

Scripps declined to comment further.

The sale of Shopzilla, which was purchased in 2005 for $525 million in cash by the E.W. Scripps Co., Scripps Networks' parent company before Scripps Networks was spun off in July 2008, will essentially eliminate Scripps Networks' interactive services division, which includes Shopzilla and its shopping-related websites.

At one point, Scripps Networks' interactive services division also included uSwitch.com, a United Kingdom-based online price-comparison site for home services and personal finance that was acquired for $366 million in 2006. Scripps Networks sold uSwitch in December 2009 for $10 million.

Scripps Networks' interactive services segment had contributed to improved consolidated revenues for fourth quarter 2010, with a 38 percent increase in revenues to $67.8 million.

Scripps attributed the results to significant expansion of Shopzilla's share in Europe and the success the company had improving the online shopping experience domestically and abroad for consumers and merchants.

"We believe the platform is a tremendous leverage point to create value for consumers, to generate sales for merchant partners, and to drive innovation in new models of consumer e-commerce. In addition, Shopzilla's management team is innovative and driven. They have created one of the most important players in online retail," J.T. Treadwell, managing director with STG, said in a statement.

Scripps Networks operates a portfolio of lifestyle-oriented cable television networks and related websites. Its brands include HGTV, Food Network, Travel Channel, DIY Network, Cooking Channel and country music network Great American Country.

The company continues to maintain a full suite of interactive content businesses dedicated to the home, food, travel and country music lifestyle content categories that it serves. Those websites and related businesses did $90 million plus in revenues last year.

Business writer Carly Harrington may be reached at 865-342-6317.

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