Moving further into
marketing services and experimental ecommerce, eBay on Monday said it has agreed to buy GSI Commerce for about $2.4 billion in cash and debt.
Expected to close in the third quarter of the
year, eBay CEO John Donahoe said he expected the merger to close the loop with online buyers and sellers. "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."
With more than 180 customers across 14 merchandise categories, GSI has commerce services relationships
with a large network of retailers and brands.
"Technology is changing how consumers shop, and retailers and brands are changing how they compete," Donahoe said.
The merger consideration
would represent a 51% premium over GSI's March 25 closing stock price. It's also a 47% premium over the average closing price of GSI Commerce common stock during the 30 trading days prior to March 28.
As part of the transaction, eBay will divest 100% of GSI's licensed sports merchandise business and 70% of ShopRunner and Rue La La.
In a statement, eBay said these businesses are not core
to its long-term growth strategy. As such, these assets will be sold to a newly formed holding company, which will be led by GSI founder and CEO Michael Rubin.
Overall, eBay expects the
transaction to result in synergies of approximately $60 million by 2013.
In addition, as part of the divestiture, eBay plans to loan the holding company $467 million and retain a 30% stake in
Rue La La and ShopRunner. Also, Rubin is expected to invest additional cash of $31 million in the holding company.
Under the terms of the merger agreement, GSI Commerce may solicit acquisition
proposals from third parties for a 40-day "go-shop" period continuing through May 6. It is not anticipated that any developments will be disclosed with regard to this process unless GSI Commerce's
Board of Directors makes a decision with respect to a potential superior proposal, eBay said in a statement issued on Monday.
GSI acquired e-Dialog in early 2008 for $157 million in an effort to
broaden its interactive-marketing services division. The plan was to provide e-mail marketing services to GSI's e-commerce clients, including Bath & Body Works, Toys 'R' Us and Major League Baseball.
More recently, in late 2009, GSI agreed to acquire Retail Convergence, the owner of invitation-only, discount luxury shopping site Rue La La and discount shopping site SmartBargains, for as much
as $350 million. GSI said it would pay $180 million in cash and stock, along with an earn-out of up to $170 million.