ProSieben e-commerce arm buys control of Aroundhome

FRANKFURT (Reuters) - German media group ProSiebenSat.1 Media's PSMGn.DE e-commerce arm NuCom is buying control of Aroundhome, an online broker for home services and products, in a deal valued at 140 million euros ($161 million).

The investment represents a bet on taking the lead in the German-speaking region to help people searching for a company to put a solar panel on their roof, install a new kitchen or fix their central heating.

“We see a huge market potential in Europe,” Aroundhome founder and CEO Robin Behlau said in an interview, adding home spending in Germany, Austria and Switzerland was worth more than 65 billion euros a year.

Aroundhome, previously called Kaeuferportal, says it has achieved average revenue growth of 35 percent a year since 2014. It has just rebranded and launched a promotional campaign that includes advertising on ProSieben’s stable of TV channels.

The deal will ensure NuCom, an investment vehicle set up by ProSieben to boost online growth as its core advertising-funded TV business struggles, has controlling stakes in all of its 10 properties.

Shares in ProSieben are trading near seven-year lows, putting pressure on CEO Max Conze, who has been in the job for six months. Conze in November cut ProSieben’s dividend payout ratio and lowered his revenue forecast.

As part of the deal, investor General Atlantic will swap its stake in Aroundhome for an increased holding in NuCom, which will rise to 28.4 percent from the 25.1 percent when it came in as a partner last February.

“Our medium-term goal is for Aroundhome to become the clear category champion,” NuCom Co-CEO Claas van Delden told Reuters.

He said the online market for such services was, in Germany, “effectively vacant,” but growing rapidly in countries like the United States, where the partners in the deal see ANGI Home Services as a model.

ANGI, owned by IAC/InterActiveCorp IAC.O, is valued at six times revenues whereas Aroundhome is worth two times, said van Delden: "We see great potential to add value."

For General Atlantic, the deal simplifies its relationship with NuCom while backing Aroundhome’s promotional drive, said Principal Christian Figge.

In the Aroundhome deal, NuCom will raise its voting stake to 94 percent from 42 percent. It will acquire 42 percent from General Atlantic via a share swap, and pay cash to buy a further 10 percent from Aroundhome’s founders.

CEO Behlau will retain a 6 percent stake and continue to run the company.

NuCom expects to achieve revenues of 1 billion euros this year and 2 billion by 2023. Van Delden said it targeted annual organic revenue growth of 10-15 percent, rising to 20 percent including acquisitions.

Reporting by Douglas Busvine; Editing by Thomas Seythal and Mark Potter