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NEW YORK — In May 2012, Tim Armstrong, the chief executive of AOL, promised restive investors that he would make Patch, the company’s hyperlocal news division, profitable by the end of 2013. When the deadline arrived and Patch was still losing money, Armstrong promised to take on partners to share the cost burden.
On Wednesday, AOL announced it had done just that.
Hale Global, an investment company that specializes in turning troubled companies through technological innovations, would essentially take over the operation, AOL said.
Hale’s intention for now, the companies said, was to keep operating all of Patch’s 900 sites.
The financial terms of the deal were not disclosed. But the companies said AOL would put Patch into a new limited liability company, which will be majority owned and operated by Hale. The deal effectively removes Patch from AOL’s financial books.