The Meet Group has just announced its third major acquisition in a year, buying LOVOO for $70m.
The dating group announced today it has entered a definite agreement to acquire LOVOO for $70m in cash.
With the deal, The Meet Group expects that LOVOO will remain a separate brand and a standalone mobile app.
LOVOO was founded in 2012, and currently has over 5m MAUs and 1.9m DAUs, according to the joint press release.
The German company, which has 97 full-time employees in Dresden and Berlin, also has a trailing 12 month revenue of €27.2m or $32.4m based on current exchange rates.
The Meet Group said it has made offers to all 97 employees, and that the headquarters will remain in Dresden, Germany.
Speaking about the deal, The Meet Group CEO Geoff Cook said: “We are very excited to expand our global footprint and add LOVOO to our portfolio of apps. LOVOO is our third strategic acquisition in the last 12 months and will represent our largest single app in terms of traffic.
“We are focused on accelerating growth across our portfolio of brands through innovating our live-streaming video product and sharing best practices in monetization and engagement across the portfolio.”
After the deal is closed, The Meet Group expects its MAUs to increase by 48% to 15.8m, and its DAU to increase 71% to 4.6m.
Mobile chats will also rise 19.9% to 74.6m and daily new mobile users will increase by 32% to 146,000.
In terms of the combined financial position, The Meet Group CFO David Clark said: “We expect the acquisition to close in October 2017, to be accretive to non-GAAP EPS and to generate additional free cash flow for The Meet Group in 2018 and beyond.
“This acquisition helps further diversify our revenue streams with 48% of LOVOO’s revenue coming from subscriptions and 24% from in-app purchasing.”
The deal comes just under a year after LOVOO paid a €1.2m fine to end legal proceedings against the company after the dating brand’s offices were stormed by armed police in connection with allegations of customer deception.
Following the raid, LOVOO founder & CEO Benjamin Bak resigned from his position at the company on 27th June, and LOVOO then paid a €1.2m fine to suspend all legal proceedings.
The Meet Group said Bak will assist with the transition for six months after closing, after which current COO and co-founder Florian Braunschweig will take over leadership as General Manager and Managing Director.
The acquisition is being financed with both cash on hand and a non-dilutive increase to $80m of The Meet Group’s existing debt with JPMorgan Chase Bank, N.A. and Silicon Valley Bank.
It is the third major statement of intent in a year from The Meet Group, and further confirms the company as one of the dating market’s clear leaders, with only the Match Group ahead in terms of portfolio approach.
Next week, The Meet Group’s SVP of Corporate Development, Jim Bugden, will speak about consolidation in a fragmented market at the GDI conference in London – find out more here.