BOCA RATON — FriendFinder Networks Inc. today said it is dumping its JigoCity division and selling it back to its original owner for $1.
FriendFinder last September acquired BDM Global Ventures, parent of JigoCity, in a stock deal that was worth about $4.3 million when FriendFinder's stock price was more than double what it is today — 90 cents as traded on the Nasdaq today.
FriendFinder at the time had hoped to benefit from the social networking platform, affiliate network and global reach where JigoCity operates.
JigoCity, which focuses on "daily deals," operates in such foreign markets as Australia, Brazil, China, Singapore and Taiwan. Recently, it was announced that it was pulling out of the Hong Kong market, where it continues to operate on a limited basis.
The $1 sale to JigoCity's original owner, Anthony R. Bobulinski, allows for the cancellation of the majority of stock warrants included in the acquisition last September. FriendFinder said it would be able to cancel 4.1 million of 6.4 million warrants with strike prices ranging from $7 to $18 a share issued during the acquisition.
FriendFinder also said it would reimburse Bobulinski through his Global Investment Venture company up to $2.16 million for business expenses from July through June 2013.
In return, Bobulinski has agreed indemnify and hold FriendFinder harmless from legal action.
FriendFinder, an operator of scores of online dating sites including AdultFriendFinder, did not immediately respond for comment on the deal announced today.