Tech Con caught up with Michael Montgomery of Montgomery & Co. LLC late Wednesday just before he got on a plane for France for an extended vacation. The investment banker certainly earned the R&R after representing Club Penguin in its acquisition by the Walt Disney Co. The Mouse House will pay up to $700 million for the Penguin, with $350 million up-front and a potential $350 million in earnouts.
Montgomery described the auction process for Club Penguin as “quite competitive.” Although he wouldn't disclose other suitors, Sony Corp. and News Corp. are believed to have been involved.
“Frankly, it was a case where there were a number of people who looked at it, and the company took its time finding the right partner,” Montgomery said. “This was very much about expanding the business — they didn’t just want the highest price, but the right strategic fit. Value was just one of the considerations.”
For Montgomery & Co. the deal was the latest in a string of digital media transactions. Within the past two years, it represented Intermix Corp./MySpace.com in its $580 million sale to News Corp., video content provider iFilm Corp. in its $49 million sale to Viacom Inc., online video sharing site Grouper Networks Inc. in its $65 million sale to Sony Pictures Entertainment in 2006 and men’s lifestyle Web publisher UGO Networks Inc. in its pending acquisition by Hearst Corp. earlier this month. Indeed, the bank has been helping plough up Internet business models for years — in 2004, for instance, it joined UBS Investment Bank in advising Rent.com in its $415 million sale to eBay Inc.
"We’ve invested a good seven years in this space, know the underlying trends and have gotten to know the buyers," he said of the red-hot consumer Web sector. "After a while there’s a cumulative amount of knowledge you build up. We’ve established ourselves as the leader in the space, and that's helped us get additional business." —David Shabelman
See Aug. 1 story from TheDeal.com
See June 15 post from VC Ratings
Tags: virtual+worlds, club+penguin, disney, dis, vc, venture+capital
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