Groupon is negotiating with several private equity firms and South Korean conglomerates

Absrtact: ' February 7, sources revealed in Friday that Groupon, America's largest Groupon group, is negotiating with several private-equity firms and South Korean conglomerates to consider selling monster, the country's second-largest mobile ticket. Assessment of Ticket Monster by this transaction

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February 7, the source said in Friday, the United States's largest group purchase website Groupon is in talks with a number of private companies and South Korean conglomerates to consider selling South Korea's second-largest mobile ticket monster's controlling power. The deal's valuation of ticket monster is about $1 billion trillion.

Groupon announced early last year that it was spending $260 million to buy South Korea's ticket Monster from rival LivingSocial. In a 260 million dollar bid, Groupon paid 100 million dollars in cash and 160 million dollars in shares. Ticket Monster was founded in May 2010 and was LivingSocial acquired in August 2011.

The deal will allow Groupon to get part of the cash. In addition, the deal will allow Groupon to pull out of Asia, which has grown rapidly but has consumed much of the company's cash.

Currently, Groupon treats ticket monster all its revenues and expenses exactly as it treats U.S. revenue and spending. Ticket Monster is still in the early stages of development and is competing for market share with South Korea's largest mobile power provider Coupang. Ticket Monster's huge investment has brought huge spending to the company, but the profitability of these investments is very low.

When Groupon bought Ticket Monster last January, the South Korean company's revenue in the three quarter of 2013 was 78.5 million dollars, operating at a loss of $38.7 million. This is also the last time that ticket Monster has disclosed its performance to outsiders as an independent entity. On the other hand, as Groupon's business matures, the company's current focus is on improving cash flow and profitability, and limiting spending.

Separating a company's fast-growing business from its slow-growing business has become a spin-off strategy recently taken by many of America's leading companies, including Yahoo's spin-off of Alibaba Group Holdings and ebay's split online payment business PayPal. The idea of such a break-up is simple: Investors who are focused on the growth of their businesses want to get something completely different from the investors who are focused on cash flow. So a spin-off can offer an option to investors, typically raising the valuation of two spin-off businesses.

Selling ticket Monster's controlling stake will allow Groupon to continue to share the return on investment that ticket monster valuations have brought to the company while reducing spending. The company's valuations have now grown three times-fold compared with the acquisition of ticket monster early last year. And if the deal can be completed in the first quarter, it will also greatly boost Groupon's first-quarter results.

The most important thing for investors is that Groupon's key financial data-operating margins and profits before interest, taxes, depreciation and amortization-should continue to improve. Because Ticket Monster's revenue can continue to grow, it will not generate a lot of profit, so it will depress Groupon's overall profit margin. Selling ticket Monster's controlling stake will naturally boost Groupon's profitability. This is a natural way to satisfy Groupon's investors. (Mowgli)