Zagat off the Block; Couldn't Find A Buyer
This story was written by Rafat Ali.
The publisher of the eponymous Zagat guides, which put itself on sale earlier this year, has now changed its mind after lukewarm interest and the economic climate. The company hired Goldman Sachs to seek a buyer for the company six months ago. "In light of the current economic climate, we have decided to continue to grow our business organically," Founders Tim Zagat said. When it came on the market first, the hopes were around $200 million...some buyers baked at the price, and later reports pegged strategics as the possible best option for the company. In 2000, Zagat family sold off a third of its business, and was valued at more than $100 million. The buyers were investment group led by General Atlantic Partners, and included Kleiner, Perkins, Caufield & Byers and Allen & Company.
The company now plans to "ramp up its investment in...its Internet and mobile products and services, while aggressively extending its licensing partnerships worldwide." They have to: with the rise of consumer reviews of restaurants and hotels online (and with strong local sites like Yelp), the company's business is facing tough competition. Also, Zagat's online business has largely remained a paid subscription service, thus capping its growth.
By Rafat Ali