Israeli web development company Wix said last week that it had purchased popular West Hollywood-based online artist platform DeviantArt for $36 million, including $3 million in assumed debt.
DeviantArt has built a small empire of devoted users – some 40 million – since it was founded in 2000 and has more than 325 million individual pieces of original art housed on its platform. In an interview on Feb. 23, company co-founder and Chief Executive Angelo Sotira said the deal with Wix initially began as a marketing proposition but quickly evolved.
“We were looking for a potential strategic partner, and at the same time we were going through this process we got a call from Wix about a possible marketing or advertising relationship,” Sotira said.
The two sides were set to meet in San Francisco in October, but just before Sotira was set to fly up he got word that Wix Chief Executive Avishai Abrahami wasn’t able to make the meeting. Disappointed, Sotira almost canceled, but then did something out of character.
“I said screw it, let’s go anyway, which is something I never do,” Sotira said. “And we got up there and Avishai ended up being able to make the meeting and immediately locked on to the new site design we want to do, and we had an amazing conversation on a product level. It was incredible.”
While the relationship was sparked at that fall meeting, it was a December trip to Wix’s headquarters in Tel Aviv where acquisition talks started in earnest. Sotira said he immediately felt at home there and that Wix’s resources would help DeviantArt update functionality while keeping the feel – or “language,” as Sotira calls it – of the site intact.
“DeviantArt is a sprawling place and there’s certainly more efficient ways to do things while keeping the experience of the site intact, and that’s what we wanted to do,” Sotira said. “But these things are very difficult and are almost impossibly expensive for a company our size. With Wix, we don’t have that issue.”
For Wix, the deal means access to DeviantArt’s artists, which the Israeli company can pitch its web design products to as a way to help users “showcase their creativity online and build their brands.”
As part of the deal, Sotira will join Wix’s management team, and the entire DeviantArt staff will come on as employees of Wix. Sotira said he and Chief Technology Officer Andrew McCann – the company’s only board members – had about an 80 percent stake in the company, with several past strategic partners owning the rest of the shares.
Cool New Digs
While Cooley lawyers in the Bay Area are still prepping for client Snap Inc.’s initial public offering in March, the firm’s L.A. outpost scored a big win last week by poaching the head of Century City-based Stroock & Stroock & Lavan’s private equity practice.
Ray LaSoya, who counts Platinum Equity and Shamrock Capital Advisors among his clients, joins Cooley’s Santa Monica office as a partner in the firm’s M&A group, where he will work alongside a team with deep L.A. connections. In addition to Snap, Cooley has been involved in some of the bigger transactions featuring regional players, including Dollar Shave Club’s sale to Unilever in July.
LaSoya said he was excited to move from Stroock to Cooley, where he felt his private equity book of business would fit well with the firm’s expertise.
“The private equity industry has been much more focused on the tech and life sciences spaces in recent years, and Cooley has huge expertise in these areas,” LaSoya said.
LaSoya did not say how much of his book of business he was bringing over from Stroock, but did say he enjoyed deep relationships with many of his clients.
“I’ve been fortunate to have a very loyal client base in the past and I hope to work with all of them going forward,” he said.
While at Stroock, LaSoya helped Platinum on deals involving metal coating company MetaKote Corp. and the San Diego Union-Tribune; transactions for Shamrock included Newport Beach-based telecommunications company Mobilitie Investments III and networking provider Netgear Inc.
Deals on Deals
What happens when you have multiple clients decide to close deals the same week? Ask your colleagues for help, according to Sheppard Mullin Richter & Hampton partner David Sands.
“We do so much M&A work that we have an experienced and deep team of people who can step in to help with the workload,” Sands said.
This came in handy the first week of February when Sands had four deals close within a five-day period, including two on Feb. 6. The transactions included his representation of Sherman Oaks-based Prospect Mortgage in its sale to HomeBridge Financial Services Inc.; Stearns Lending, which spun off part of its business in a sale to Flagstar Bancorp Inc.; and private equity shop Sterling Partners, which sold SoCal Roto-Rooter franchise Hoffman Southwest Corp. to Orix Capital Partners.
Staff reporter Henry Meier can be reached at [email protected] or (323) 549-5225, ext. 221.
