The details of the purchase include a $40 million investment for stake in OCC. In addition, SEEK will claim two of five board seats and will become an active developer of strategy and growth within OCC.
“SEEK has continued to look for opportunities to expand its international footprint in attractive markets, following on from our investments in China, Brazil and South East Asia,” said Jason Lenga, SEEK’s Director of Corporate Strategy. “Mexico is the 11th largest country in terms of population and 13th in terms of GDP. With both internet penetration and online advertising growing rapidly, the online employment classifieds market is expected to enjoy significant growth over many years.”
Lenga continued, “OCC has built a commanding leadership position in the Mexican online employment market and has an excellent management team who we look forward to working with. OCC’s historical financial performance is impressive, with high margins and strong free cash flow generation.”
SEEK has funded the investment via its $250m bank debt facility and will equity account for the investment as an associate. SEEK expects the investment to be marginally earnings per share positive in FY11 on a cash basis and is confident it will be significantly accretive in the longer term.
Other recent investments include a purchase in 2008 in which SEEK paid $67.5 million for a 30% interest in Brasil Online Holdings, owner of Catho Online and Manager Online, two leading employment websites in Brazil. A month earlier, SEEK also purchased through off-market trades a 10% interest in JobStreet Corporation Berhad (JobStreet, listed in Malaysia).