LEAF GROUP LTD. (NYSE:LFGR) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01
On April 24, 2020, Leaf Group Ltd. (the “Company”) entered into an Asset Sale and Services Agreement (the “Agreement”) with Hearst Newspapers, a division of Hearst Communications, Inc. (“Hearst”), to which the Company sold a library of content carried on certain websites (the “Hearst Sites”) that had been hosted by the Company on behalf of Hearst (the “Hearst Content”) to Hearst for $9.5 million, of which $4.0 million was paid at signing. The balance of $5.5 million is payable upon completion of the migration of the Hearst Content to servers controlled by Hearst, subject to certain deductions tied to the achievement of key performance indicators related to the migration process. The migration is expected to be completed in the third quarter of 2020. In addition, the Agreement contemplates that, for a three-year initial term, the Company will provide certain content and web services in connection with the management of the Hearst Content, for which the Company will be paid certain fees for the content and web services provided and a revenue share based on the net revenue from the Hearst Sites.
The foregoing is only a summary of the material terms of the Agreement, does not purport to be a complete description of the rights and obligations of the parties thereunder, and is qualified in its entirety by reference to the Agreement, which will be filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2020.
About LEAF GROUP LTD. (NYSE:LFGR)
Leaf Group Ltd., formerly Demand Media, Inc., is diversified Internet marketplaces and media company. The Company has online media properties and marketplace platforms that enable communities of creators to reach audiences in lifestyle categories. The Company operates an online studio platform for the professional creation and distribution of content, as well as two online artist marketplaces. Its business comprises two service offerings: Content & Media and Marketplaces. The Company creates media content, including text articles, videos, photographs and designed visual formats, and publishes such content to its owned and operated online properties and to its customers’ online properties. The Company also offers its content creation and distribution platform to provide custom content and other content marketing solutions to brands, publishers and advertisers.
