A sudden turn for Saatchi Art:
Demand Mdia just announced its intent to buy Los Angeles-based Saatchi Art for $17 million in cash and stock. As part of the deal, Saatchi Art CEO Sean Moriarty will become Demand Media’s new CEO. Moriarty has deep connections to the tech community, including serving on the boards of Eventbrite, Metacloud, and TuneIn. He has been CEO of Saatchi Art since August 2013 and before that was President and CEO of Ticketmaster.
The deal comes as Demand Media is working to restructure itself away from lower performing business units. Recently Demand Media has sold off Rightside, an Internet domain registration service, CreativeBug, an online video arts and crafts business, and CoveritLive, a live event-publishing platform.
Demand Media has generally made its name as an online content production house with brands such as Livestrong, eHow and Cracked. And though Demand Media owns a consumer art company called Society6, that sells gallery prints on posters, iPhone cases, tote-bags and similar consumer products, the acquisition of Saatchi does not at first seem like an obvious merger. Saatchi Art is more focused on selling mid-market artwork, while Society6 is much more of a consumer-focused company. How Saatchi Art will fit into Demand Media’s existing businesses remains to be seen.
Variety adds a little detail:
Demand Media announced that it has acquired Saatchi Online for $17 million comprised of a mix of cash and stock. As CEO of Saatchi Art Moriarty was a shareholder, “but did not receive any proceeds from the transaction,” according to a Demand Media rep. […]
Moriarty, 44, will receive an annual base salary of $400,000, according to a filing by Demand Media with the Securities and Exchange Commission. He also will be granted stock options in Demand Media currently worth $13 million; 25% of the shares subject to the stock option will vest on Aug. 12, 2015, with the remainder vesting over the following four years.
Demand Media, based in Santa Monica, Calif., launched its initial public offering in January 2011 and soared to a market capitalization of more than $2 billion. But the company’s business largely relied on driving traffic from Google search results to its websites, and suffered a falloff after Google modified its algorithms. and Demand Media’s revenue has been steadily shrinking.