The rumors are true: hedge fund Criterion Capital Partners is indeed the buyer of Bebo. As we reported yesterday, AOL is offloading the social networking service for less than $10 million (other media are reporting a purchase price of around $2.5 million).
To remind you: AOL paid $850 million for Bebo back in 2008. Ouch indeed.
In a press release that just went out, Criterion acknowledges that it has acquired the Bebo business from AOL and that it will “assume the rights and complete operating control over the global social platform business”.
The acquisition and financing was led by CCP partner Adam Levin in partnership with business strategist Paul Abramowitz and web entrepreneur Richard Hecker.
Criterion Capital Partners will take over Bebo’s global operations immediately and retain its San Francisco-based headquarters.
Exact terms of the deal are not being disclosed by either party, but AOL CEO Tim Armstrong sent a note to all employees this morning that suggests our earlier reports that the ability to offset almost the whole sum it paid for Bebo as a tax loss played a big role are correct.
A couple of paragraphs from said note (emphasis ours):
In April we communicated the fact that Bebo was among the assets we
would be not be keeping as part of our main portfolio of businesses.
At that time, we indicated that we hoped to finish our strategic
evaluation by the end of May, which we did. Today we are announcing
that we completed the sale of substantially all of the assets of Bebo,
Inc. to Criterion Capital Partners, LLC.This sale is important for Bebo’s users and for AOL. The deal will
allow Bebo’s users to remain within the social platform that they know
and love, while enabling a new owner to bring new possibilities and
experiences to bear. Criterion Capital Partners are specialists in
facilitating growth plans and turnarounds and are well placed to drive
Bebo’s effort to strengthen its foothold within the highly competitive
social networking arena.For AOL, the transaction will also create a meaningful tax deduction,
which should allow us to more effectively manage our tax strategy.
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