ST. PETERSBURG — Three years ago, St. Petersburg-based startup the Penny Hoarder was named one of the country’s fastest-growing media companies by Inc. magazine. Now, it’s being purchased in a multi-million-dollar deal by one of the largest public companies in the Tampa Bay area.
Tampa’s Sykes Enterprises is acquiring millennial-focused finance publication the Penny Hoarder.
Sykes’ digital marketing subsidiary, Clearlink, is set to acquire the publication’s parent company, Taylor Media Corp. for $102.5 million through a stock purchase “for an all-cash purchase consideration,” according to a news release Monday. The deal is expected to close by the end of the year.
“The financial services industry is changing rapidly and consumers need an ally in navigating this new economy more than ever,” said Kyle Taylor, the Penny Hoarder founder and chief executive officer. “Our partnership will give us a leg up in meeting these challenges while providing more opportunities for our employees and advertisers. We couldn’t be more thrilled to join the team.”
The Penny Hoarder is a personal finance website with millions of monthly followers. It focuses on practical advice for managing finances, much of which is geared toward a younger audience.
Its acquisition coincides with its 10-year anniversary. The digital media company posted $50 million in revenue in the 12-month period ending Sept. 30.
Sykes provides customer engagement services for clients mainly in the financial services, communications, technology, transportation, leisure and health care industries. It was the No. 9 largest public company in Tampa Bay by revenue in 2019, posting $1.61 billion in revenue.
Chuck Sykes, president and CEO, said that “the insights, knowledge and expertise that we gain through the (Penny Hoarder) transaction will not only enable us to help consumers make informed decisions about financial products and services, it will also help us strengthen the brand and growth of financial services clients all over the world.”
Sykes first approached the Penny Hoarder over the summer about the acquisition, according to Sykes representative Jesse Himsworth, and “has admired the Penny Hoarder for some time.”
Penny Hoarder founder Taylor will retain his position after the acquisition, as will all of the publication’s current employees. It will stay located in St. Petersburg.
The year-end upswing comes nearly two years after the publication laid off a portion of its staff in a reorganization. While the company did not disclose the number of employees it let go in early 2019, Creative Loafing reported 47 job cuts. The Penny Hoarder had 80 employees in 2017.
At the time, Taylor said that the Penny Hoarder “has always been an independent, bootstrapped company, and we intend for it to continue to be.”
He did not respond to multiple calls and emails asking how he decided to move away from that independence with the current acquisition.
The publication committed in 2018 to create 165 positions by this year in exchange for government financial incentives. If it achieved this, it could have received up to $990,000 from a combination of state and local sources depending on the amount of taxes it paid.
According to state records, the Penny Hoarder created 41 of those positions — 25 percent. In early 2019, the city of St. Petersburg granted the Penny Hoarder an extension it requested on the deadline, two months before its layoffs.
“As long as we’re not paying anything we’d like to give companies the opportunity to be able to make those numbers and create those jobs,” said Sophia Sorolis, director of economic and workforce development.
The city, which would have paid up to $99,000 of the incentive package, paid $3,823.37. To date, the Penny Hoarder has received $38,233.67 under the incentives package from all sources, according to state records, and the incentives are currently listed as “inactive.”
At the close of market Monday, Sykes shares were just under $38, down less than 3 percent.