Chinese digital media group Focus Media has announced that the company and its subsidiary Allyes will implement a management buyout, acquiring a 38% stake in Allyes for USD13.3 million.
Focus Media said that a part of Allyes' employees, executives, and directors as well as Focus Media's executives and directors signed an agreement with the two companies in January 2010 and they agreed to buy a total of 38% stake in Allyes from Focus Media.
Under the agreement, people who participate in the acquisition will invest USD13.3 million for the deal. The value of this management buyout is set in accordance to various factors, including Allyes' handling of several small Internet businesses in the fourth quarter of 2009 and a valuation report from an independent third-party firm. However, Focus Media is currently evaluating the related accounting impact of the transaction.
The transaction has reportedly been approved by all independent directors of Focus Media. Through this transaction and other measures, Focus Media aims to encourage the management team to enhance Allyes' future business model and to seek a sustainable growth for the company and its investors.
Focus Media also announced its unaudited financial results for the fourth quarter and full year ended December 31, 2009. Total net revenue for fourth quarter 2009 was USD144.3 million, of which the aggregate net revenue for the LCD display network, in-store network and poster frame network was USD98.3 million. GAAP net loss attributable to Focus Media was USD52.5 million or a loss of USD0.39 per fully diluted ADS, compared to net loss attributable to Focus Media of USD127.6 million for the third quarter of 2009 or a loss of USD0.99 per fully diluted ADS and net loss attributable to Focus Media of USD802.5 million for the fourth quarter of 2008 or a loss of USD6.24 per fully diluted ADS.
Total net revenue for full year 2009 at Focus Media was USD505.0 million, declining 21% from USD642.3 million for full year 2008, substantially due to unfavorable macro-economic condition and strategic reorganization related to several lines of the company's businesses.