ProSieben to Buy Dating Firm Meet Group in Tough TV Market

(Bloomberg) --

ProSiebenSat.1 Media SE plans to buy The Meet Group Inc. in an all-cash deal as the German broadcaster tries to counter a drop in TV advertising revenue by bolstering its digital efforts.

NuCom, the e-commerce unit jointly run by ProSieben and General Atlantic, will pay $6.30 per Meet share, Meet said in a statement. That's a 14% premium to the target's closing share price on Tuesday, the day before reports of takeover talks emerged. The deal has an equity value of about $451.8 million, according to Bloomberg calculations.

ProSieben has tried to overcome what it said has been a “challenging” TV ad market by making investments in digital activities. It's also continuing its strategy of betting on local content to stay relevant as TV viewers defect to streaming platforms like Netflix and Amazon Prime Video. ProSieben's platform, Joyn, had more than 7 million total monthly active users across all devices at the end of last year.

NuCom bought Santa Monica, California-based couples matchmaker Eharmony Inc. in 2018 for around $85 million as it expanded its footprint in the U.S. It also owns Parship, which is among the leading matchmakers in the German-speaking region. The Meet Group's brands include the U.S.-centric MeetMe and Growlr platforms and the mostly German-language online dating app Lovoo.

The deal is expected to close in the second half, according to the statement.

The Meet purchase came alongside ProSieben's Thursday report that sales grew 3% last year to 4.13 billion euros ($4.6 billion), slightly missing analyst estimates for an increase to 4.16 billion euros. Core TV advertising revenues fell 5%, offset by growing digital ad revenue and rising sales at its NuCom e-commerce business, the company said.

The broadcaster forecasts sales of between 4.2 billion euros and 4.4 billion euros this year, betting that digital activities will make up for declining TV revenue.

ProSieben shares fell as much as 10% to the lowest since 2010. The outlook is “quite cautious,” DZ Bank analyst Harald Schnitzer wrote in a research note.

Separately, Chief Executive Officer Max Conze said in an interview with Bloomberg TV that “it's very difficult for us to assess” the impact of concerns about the coronavirus on advertising spending. “So far we're seeing very little impact.”

To contact the reporter on this story: Stefan Nicola in Berlin at snicola2@bloomberg.net

To contact the editors responsible for this story: Jennifer Ryan at jryan13@bloomberg.net, Thomas Pfeiffer

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