eBay the e-commerce giant
The deal comes as eBay has significantly slimmed down its operations over the years, which started with the spinoff of PayPal and the sale of its enterprise business in 2015. Activist investors Elliott Management and Starboard Value have agitated for the sale of both StubHub, a ticketing marketplace, and the classifieds business, which have now both been sold off. eBay late last year agreed to sell StubHub to Viagogo for $4.05 billion in cash.
The deal, valued at $9.2 billion, includes eBay getting $2.5 billion in cash and 540 million Adevinta shares. eBay will become a 44% owner of Adevinta with a 33.3% voting stake.
The combined company will have a presence in 20 countries, covering one billion people with three billion monthly visits. Europe will be its biggest market.
It will have an estimated revenue of $1.8 billion and earnings before interest, tax, depreciation, and amortization (EBITDA) close to $600 million.
Reasons behind eBay downfall
What’s mainly left of eBay is its core online marketplace, which over the years has diminished in influence in e-commerce. Walmart this year overtook eBay as the second-biggest online seller in the US, according to the researcher eMarketer, following years of lackluster growth at eBay.
“eBay believes strongly in the power of community and connections between people, which has been essential to our classifieds businesses globally,” said Jamie Iannone, chief executive officer of eBay.
“This sale creates short-term and long-term value for shareholders and customers while allowing us to participate in the future potential of the classifieds business.”
As part of the Adevinta deal, eBay will receive $2.5 billion in cash and own 44% of the company, though only have 33% of voting rights. The sale is expected to close by the first quarter of next year.
“With the acquisition of eBay Classifieds Group, Adevinta becomes the largest online classifieds company globally, with a unique portfolio of leading marketplace brands,” said Ryssdal.
“We believe the combination of the two companies, with their complementary businesses, creates one of the most exciting and compelling equity stories in the online classifieds sector.”
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