The international banking corporation for investment, securities and retail, JPMorgan Chase & Co. (JPM) has acquired Bloomspot Inc. an online daily deal site that offers discount coupons to top restaurants, weekend getaways and spas. According to a memo, JPMorgan Chase & Co. will spend $35 million to make this acquisition.
It was also learnt through the memo that this American corporation wanted to buy this coupon company because they would like to offer better discounts to their credit card holders while making purchases from local shops.
However, this deal will take time to get close, as it is anticipated that it will be finished till the end of January, but once Bloomspot is acquired by JPMorgan the investors of the coupon company will get 67 percent return over their investment, as mentioned by the Chief Executive Officer of Bloomspot, Jasper Malcolmson in an email.
Malcolmson wrote that, “While we are disappointed that the deal is not generating a positive return for our investors, given alternatives, we believe this is a good outcome for our equity investors”.
Aside from this, Malcolmson also mentioned in the memo to investors that this deal will give the credit card department of JPMorgan roughly 100 employees from Bloomspot along with its precious technology.
Once the consumer division of JPMorgan gets their hands on Bloomspot technology they will be able to make more loyal customers. This division is already working on building loyalty in clients by allowing them to redeem discounts as web coupon king Groupon does.
What remains to be seen is how well this integration will work for JPMorgan because the multinational corporation has made this deal at a time when coupon industry is going through a slump. Due to this slump, Groupon’s stock has fallen by 76 percent, whereas another key player in this business, LivingSocial Inc. has already announced that they are planning to reduce their staff.
Source: BusinessWeek
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