Comcast-Backed Atairos Invests $250M in Groupon

An investment fund started by former Comcast vice chairman and chief financial officer Michael Angelakis and backed by the cable company has made its first major investment, pumping $250 million into Internet company Groupon.

Angelakis retired from Comcast last year and announced the formation of his investment company Atairos, with a total capital commitment of $4.1 Billion -- $4 billion invested by Comcast.

In a statement, Groupon said it will use the money for general corporate purposes, including repurchasing its stock. As part of the deal, both Groupon and Comcast will work together to “identify and implement potential strategic partnership opportunities.”

Groupon, an Internet darling when it launched its Initial Public Offering in 2011, has had a rougher time lately as it attempts to transform itself into an online market place. The investment, coupled with the potential of the Comcast relationship, helped drive the stock up as much as 16% Monday after the deal was announced. The stock closed at $4.29 per share on April 4, up 9%.

"Groupon is an established leader in connecting customers with local businesses," said Comcast Cable CEO Neil Smit in a statement. "The potential in combining Groupon's local expertise with Comcast's vast subscriber and advertiser network is something we look forward to closely exploring together."

As part of the deal, Angelakis will join Groupon’s board of directors.

"Our partnership with Atairos will help accelerate our transformation while better positioning us to execute on our strategy and mission to build the daily habit in local commerce -- which we continued to make progress on in the first quarter," said Groupon CEO Rich Williams in a statement. "I am extremely pleased that a respected, long-term oriented partner like Atairos shares our view about the vast opportunity ahead for Groupon."

"We are excited to be partnering with Groupon, the undisputed global leader in hyper-local commerce with nearly 50 million active customers," Angelakis said in a statement. "Since creating the market in 2008, Groupon has redefined local commerce by increasing consumer buying power and changing the way businesses attract customers using modern mobile technology. We look forward to working closely with Groupon's Board and management team as they pursue their strategic growth objectives."

J.P. Morgan Securities LLC is serving as financial advisor to Atairos and Davis Polk & Wardwell LLP is acting as legal counsel. Allen & Company LLC and Morgan Stanley & Co. LLC are serving as financial advisors to Groupon and Winston & Strawn LLP is acting as legal counsel.