February 23, 2017 / 1:07 PM / 5 months ago

Israel's Wix buys DeviantArt for $36 million, raises revenue outlook

2 Min Read

The offices of website-designer firm Wix.com are shown in Tel Aviv, Israel July 4, 2016.Baz Ratner/File Photo

TEL AVIV (Reuters) - Israel-based Wix.com (WIX.O) said on Thursday it acquired DeviantArt, an online community for artists and designers, for $36 million in cash and raised its revenue outlook for 2017.

Wix, which helps small businesses build and operate websites, will have access to Los Angeles-based DeviantArt's more than 40 million registered members and over 325 million pieces of original art.

As a result of the deal, Wix raised its 2017 revenue outlook by $8 million to $417-$419 million. Investments in DeviantArt's platform will raise headcount and decrease 2017 free cash flow by $8 million to $63-$64 million.

This is the first overseas acquisition for Wix, which saw revenue grow 48 percent in the fourth quarter of 2016 to $84.2 million as it beat expectations.

The company has over 100 million registered users. As of Dec. 31, Wix had $172 million in cash.

Last week Wix President Nir Zohar told Reuters that the company is pursuing a strategy of courting paid subscribers by developing products for niche users such as photographers and musicians.

DeviantArt will maintain its own brand as Wix helps it grow as a platform for artists to showcase their work, the companies said in a statement.

As part of the deal, DeviantArt co-founder and Chief Executive Angelo Sotira will join the Wix management team.

Reporting by Yuval Ben-David; Editing by Tova Cohen

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