Hearst Interactive Media is investing $8 million in Irvine, CA-based business directory site Local.com, which plans to use the proceeds for general working capital and strategic initiatives. Hearst did not say whether it would align Local.com in any way with its holdings, such as its 12 daily and 30 weekly newspapers. In the announcement, Kenneth Bronfin, president, Hearst Interactive Media, said he thought the company has the potential to be leader in local search advertising.
The investment, made with Greenway Capital, was in the form of debt, which can be converted into 1.99 million shares of Local.com stock at $4.02 per share. The investors also received warrants that allow them to buy 796,020 shares of Local.com at $4.82 and 796,020 shares at $5.63. Local.com has 67 employees, 9.3 million shares outstanding and a total market capitalization of about $38 million, according to the OC Register’s Morning Eye blog..
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