M&A Source: AOL Paid Too Much For HuffPo And Now Deals Are Going To Grind To A Halt

Arianna Huffington visits AOL HQ

Photo: AOL via Instagram

So now that AOL paid $315 million for Huffington Post, we’re going to see a flurry of new media acquisitions at similarly big valuations right?Not so fast, says a well-regarded and loaded-with-cash M&A source in the media industry.

“I wouldn’t jump on the “what’s next” bandwagon.”

$300 million is 30X HuffPo’s projected EBITDA this year and that’s too rich for our guy.

“The AOL-HuffPo deal may cool off Internet content M+A for a while because the multiple will create a disconnect between seller expectations and what buyers are willing to pay.”

Another source in M&A speculates that Sugar Inc, the huge blog/ecommerce network for ladies that everyone thinks AOL or Yahoo will buy next, will probably go for another round of funding instead of looking for a takeout this year.

“[Sugar CEO Brian Sugar] should raise some dough, talk the walk and launch some more things tying content to commerce.”

On a contrary note, we’ve heard that Demand Media is looking to acquire its way into premium content.

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