Online auctions and e-commerce site eBay is to acquire e-commerce and marketing firm GSI Commerce for USUS$2.4bn, or US$29.25 a share. The acquisition will be financed through cash and debt.
The move will enhance eBay’s ambition to be the leading strategic global commerce partner of choice for retailers and brands of all sizes, the company said.
The merger consideration represents a 51pc premium over GSI’s 25 March 2011 closing price and a 47pc premium over the average closing price of GSI Commerce common stock over the 30 trading days prior to 28 March 2011.
The acquisition is subject to regulatory and GSI shareholder approval, as well as other customary closing conditions.
“We intend to lead the next generation of commerce innovation,” said John Donahoe, eBay Inc. president and CEO. “The acquisition of GSI, which offers the most comprehensive integrated suite of online commerce and interactive marketing services available, will significantly strengthen our ability to connect buyers and sellers worldwide.
“Combined with eBay Marketplaces and PayPal, we believe GSI will enhance our position as the leading strategic global commerce partner of choice for retailers and brands of all sizes.”
New e-commerce powerhouse for leading brands
"With more than 180 customers across 14 merchandise categories, GSI has long-term commerce services relationships with leading retailers and brands. We expect that GSI will benefit from eBay’s global platform and technology capabilities, and its clients will be able to leverage eBay Marketplaces and PayPal services.
“Technology is changing how consumers shop, and retailers and brands are changing how they compete,” Donahoe said.
“With its complementary strengths, GSI will extend the power of our portfolio. With eBay, PayPal, GSI and our global platform capabilities, we are focused on delivering new ways for retailers and brands of all sizes – from sole proprietors to large merchants – to drive innovation, engage customers and help people shop anytime, anywhere and on any device.”
As part of the transaction, eBay will divest 100pc of GSI’s licensed sports merchandise business and 70pc of ShopRunner and Rue La La. eBay believes these businesses are not core to its long-term growth strategy. These assets will be sold to a newly formed holding company, which will be led by GSI founder and CEO Michael Rubin.
eBay expects the transaction to result in synergies of about US$60m by 2013.
As part of the divestiture, eBay will loan the holding company US$467m and retain a 30pc stake in Rue La La and ShopRunner. In addition, Michael Rubin will invest additional cash of US$31m in the holding company.