Cupid’s French connection seals a marriage aimed at expansion
By PETER RANSCOMBE
Published on Wednesday 25 July 2012 11:54
DATING website operator Cupid still has “plenty of scope” for further takeover deals this year after yesterday tying the knot with a French peer.
The Edinburgh-based com-pany, run by serial technology entrepreneur Bill Dobbie, will be sitting on a war chest of nearly £11 million come the end of the year to fuel further takeovers, according to analysts.
In its latest deal, Aim-quoted Cupid will buy Assistance Genie Logiciel (AGL) from Financiere PES, part of private equity fund CityStar Capital, for €3.7m (£2.9m).
AGL’s 25 staff in Paris run three websites, two of which – Amour.com and SeRencontrer.com – follow traditional models, while the third, Ulla.com, is “somewhat racier”, analysts said.
The deal is expected to effectively double the size of the Scots firm’s revenues from France and will turn it into “one of the largest French online dating businesses”.
Dobbie believes the brands owned by AGL also have the potential to be used in other French-speaking countries.
Emerging markets already form a large part of Cupid’s expansion plans following the acquisition in August of a number of Portuguese-language websites in South America, expanding the firm’s coverage beyond Europe and North America.
Commenting on the latest deal, Dobbie said: “The AGL business is a highly complementary addition to our current French portfolio, allowing us to become one of the largest French online dating businesses.
“In addition, we see the potential to expand at least one of the French brands into other international markets”.
Paul Morland, an analyst at house broker Peel Hunt, said: “We expect this deal to be well received by the market.
“It fits well with Cupid’s strategic objective of building market share in major geographies and investing in marketing, representing another step in Cupid’s quest to become a leading global player in online dating.”
Morland noted that the deal would close the gap between Cupid and France’s biggest player, Meetic, which is owned by internet dating giant Match.com. Cupid aims to take a 15 per cent share of the French market, Morland added.
Numis Securities analyst Ivor Jones said: “We believe the acquisition will approximately double French revenue and take Cupid’s market share to circa 8 per cent.
“Cupid does not disclose revenue by country but we estimate that the revenue run-rate in France prior to today’s acquisition was circa €6m.”
AGL, which was founded as a telephone dating service in 1986, turned over €6.5m in 2011 and posted an underlying profit of €600,000, Cupid said.