The Knot Strengthens Online Bridal Offerings With WeddingChannel.com Buy
The Knot Inc., a proposal-to-pregnancy media company, bought competitor WeddingChannel.com Inc. for $61.7 million in cash and 1.5 million company shares valued at $18 each, further consolidating its hold in the online bridal area.
Based in Los Angeles, WeddingChannel.com hosts the online wedding registries for Federated Department Stores Inc.'s Bloomingdale's and Macy's brands, J.C. Penney, Starwood Hotels, Neiman Marcus, Tiffany & Co., Crate & Barrel and Williams-Sonoma and its Pottery Barn chain.
"If you look at the core businesses of both the entities, they're very complementary," said David Liu, CEO of The Knot, New York. "WeddingChannel.com's business revolves around their wedding registry, and our business has been more media-focused.
"As a result, the two businesses complement each other very well," he said. "I think the other surprise that we have is that the unique visitors' overlap is very low: about 20 percent."
The deal comes soon after The Knot launched The Nest magazine last month and bought lilaguide, a Zagat-style book of ratings and rankings of baby-related vendors and services by other parents.
WeddingChannel.com last year generated $21.6 million in revenue. The 100-person company's investors include Federated, Amazon.com Inc. and MacAndrews & Forbes. Federated is also the largest shareholder in The Knot. It now owns a little less than 15 percent in The Knot after the WeddingChannel.com buy.
The Knot reaches 1 million engaged couples annually via its site at http://www.theknot.com/, books, The Knot Weddings' national and regional magazine editions, video on demand through Comcast Cable, content distribution across MSN and Comcast and a television show on the Oxygen Network.
The Knot last year generated revenue of $51 million. It employs 270 people in offices nationwide. Both The Knot and WeddingChannel.com vie for a larger share of the $70 billion transacted each year in the wedding industry.
Mr. Liu said his company hasn't determined whether there will be job cuts at WeddingChannel.com. The acquired site keeps its name.
"We think there is a great deal of brand value that was created by WeddingChannel and look to continue to grow that business," he said.
The Knot and WeddingChannel.com compete with Conde Nast Publications' Brides, Modern Bride and Elegant Bride magazines as well as other local bridal titles. They all fight for share in a $1 billion local ad market and a national category half that size.
"They've always been the 800-pound gorilla in the bridal media industry," Mr. Liu said of Conde Nast, "but they're a fraction of our size online."