Homestore Coughs Up Consumer Credit Unit
The online real estate firm sheds ConsumerInfo.com to focus on its core real estate business.Looking to bolster its balance sheet, embattled Homestore
Tuesday agreed to sell its ConsumerInfo.com unit to Experian for $130 million in cash.
The WestLake Village, Calif. real estate firm's division provides consumers credit information online and will no doubt be used by Nottingham, U.K.'s Experian to beef up its customer relationship management (CRM) provisions. Homestore, which since January has been hounded by accusations of accounting improprieties such as reporting inflated online advertising revenues, desires to focus on its core real estate business with the sell.
"This transaction divests Homestore of a business that is not central to our real estate focus and allows us to redeploy substantial resources to our primary business objective -- making real estate professionals more productive and profitable," said Homestore Chief Executive Officer Mike Long in a public statement.
With the deal, which is subject to Hart-Scott-Rodino clearance, Homestore expects to be generating positive cash flow from operations by the end of the year.
On March 13, Homestore said it completed its restatement of earnings for the year 2000, revealing that $36.4 million in ad revenue had been improperly recorded as independent cash transactions. The transactions in question "were reciprocal exchanges that should have been evaluated as barter transactions." Now the firm is examining financial results for first three quarters of 2001 as a result of its internal accounting probe.
Adding fuel to the fire was the fact that the very organization that was scrutinizing Homestore, the U.S. Securities and Exchange Commission (SEC), said it was peeping on transactions inked between Los Angeles ad network L90.