GSI Commerce shareholders to receive $29.25 per share in cash
Acquisition enhances eBay's position as the strategic global
of choice for retailers and brands of
SAN JOSE, Calif. & KING OF PRUSSIA, Pa.--(BUSINESS WIRE)--
eBay Inc. (NASDAQ: EBAY) announced today that it has agreed to acquire
GSI Commerce (NASDAQ: GSIC), a leading provider of ecommerce and
interactive marketing services, for $29.25 a share, or total
consideration of approximately $2.4 billion. The acquisition, which will
be financed with cash and debt, is expected to close in the third
quarter of 2011.
The merger consideration represents a 51 percent premium over GSI's
March 25, 2011, closing price and a 47 percent premium over the average
closing price of GSI Commerce common stock over the 30 trading days
prior to March 28, 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. 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," said John Donahoe, eBay Inc. President and CEO. "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
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 100 percent of GSI's
licensed sports merchandise business and 70 percent 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 approximately $60
million by 2013; the company expects the transaction to be EPS neutral
in 2011 and accretive in 2012. As part of the divestiture, eBay will
loan the holding company $467 million and retain a 30 percent stake in
Rue La La and ShopRunner. In addition, Michael Rubin will 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, 2011. 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. The merger agreement provides eBay with a
customary right to match a superior proposal. There is no guarantee that
this process will result in a superior proposal.
Goldman, Sachs & Co. and Peter J. Solomon Company are acting as
financial advisers to eBay, while Dewey & LeBoeuf LLP is acting as its
legal adviser with regard to the transaction. Morgan Stanley & Co.
Incorporated is acting as financial adviser to GSI Commerce and Davis
Polk & Wardwell LLP is acting as legal adviser to the special committee
of the GSI Commerce Board of Directors. Morgan, Lewis & Bockius LLP is
acting as legal adviser to GSI Commerce.
Assuming its acquisition of GSI closes mid-third quarter, eBay said it
expects the deal to be immaterial to its 2011 non-GAAP EPS guidance
which it announced January 19, and have a negative impact of $0.30 -
$0.34 to its 2011 GAAP EPS guidance, including a GAAP charge
primarily related to the divested GSI businesses.
eBay will host a conference call at 8 am Pacific Time/11 am Eastern Time
today to discuss this announcement. A live webcast of the conference
call, together with a slide presentation that includes supplemental
financial information, can be accessed through the company's Investor
Relations web site at http://investor.ebayinc.com.
In addition, an archive of the webcast will be accessible for 90 days
through the same link.
For more information on the transaction, including background
information and factsheets, visit http://changingshopping.ebayinc.com.
About eBay Inc.
Founded in 1995 in San Jose, Calif., eBay Inc. (NASDAQ:EBAY) connects
millions of buyers and sellers globally on a daily basis through eBay,
the world's largest online marketplace, and PayPal, which enables
individuals and businesses to securely, easily and quickly send and
receive online payments. We also reach millions through specialized
marketplaces such as StubHub, the world's largest ticket marketplace,
and eBay classifieds sites, which together have a presence in more than
1,000 cities around the world. For more information about the company
and its global portfolio of online brands, visit www.ebayinc.com.
About GSI Commerce
GSI Commerce® enables ecommerce, multichannel retailing and digital
marketing for global enterprises in the U.S. and internationally. GSI's
ecommerce services, which include technology, order management, payment
processing, fulfillment and customer care, are available on a modular
basis or as part of an integrated solution. GSI's Global Marketing
Services division provides innovative digital marketing products and
services comprised of database management and segmentation, marketing
distribution channels, a global digital agency to drive strategic and
creative direction and an advanced advertising analytics and attribution
management platform. Additionally, GSI provides brands and retailers
platforms to engage directly with consumers through RueLaLa.com, an
online private sale shopping destination, and ShopRunner.com, a
members-only shopping service that offers unlimited free two-day
shipping and free shipping on returns for a $79 annual subscription.
This press release contains forward-looking statements relating to,
among other things, the future performance of eBay and its consolidated
subsidiaries that are based on the company's current expectations,
forecasts and assumptions and involve risks and uncertainties. These
statements include, but are not limited to, statements regarding eBay
and GSI Commerce and the expected impact of the transaction on eBay's
expected financial results for full year 2011. The company's actual
results could differ materially from those predicted or implied and
reported results should not be considered as an indication of future
performance. Factors that could cause or contribute to such differences
include, but are not limited to: the receipt and timing of regulatory
approval for the transaction, the possibility that the transaction may
not close, and the reaction of consumers and GSI Commerce's customers;
the future growth of GSI Commerce; the reaction of competitors to the
transaction; the possibility that integration following the transaction
may be more difficult than expected; the company's need and ability to
manage regulatory, tax, IP and litigation risks (including risks related
to the transaction itself) as its services are offered in more
jurisdictions and applicable laws become more restrictive; the after
effects of the global economic downturn, changes in political, business
and economic conditions, including any conditions that affect ecommerce
growth; fluctuations in foreign currency exchange rates; the company's
ability to profitably integrate, manage and grow businesses that have
been acquired recently or may be acquired in the future; the company's
need to increasingly achieve growth from its existing users,
particularly in its more established markets; the company's ability to
deal with the increasingly competitive ecommerce environment, including
competition for its sellers from other trading sites and other means of
selling, and competition for its buyers from other merchants, online and
offline; the company's need to manage an increasingly large enterprise
with a broad range of businesses of varying degrees of maturity and in
many different geographies; the effect of management changes and
business initiatives; any changes the company may make to its product
offerings; the competitive, regulatory, credit card association-related
and other risks specific to PayPal and Bill Me Later, especially as
PayPal continues to expand geographically and grow its open platform
initiative and as new laws and regulations related to financial services
companies come into effect; the company's ability to upgrade and develop
its systems, infrastructure and customer service capabilities at
reasonable cost; and the company's ability to maintain site stability
and performance on all of its sites while adding new products and
features in a timely fashion. The forward-looking statements in this
release do not include the potential impact of any acquisitions or
divestitures that may be announced and/or completed after the date
More information about factors that could affect the company's operating
results is included under the captions "Risk Factors" and "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" in the company's most recent annual report on Form 10-K and
subsequent quarterly reports on Form 10-Q, copies of which may be
obtained by visiting the company's Investor Relations web site at http://investor.ebayinc.com
or the SEC's web site at www.sec.gov.
Undue reliance should not be placed on the forward-looking statements in
this release, which are based on information available to the company on
the date hereof. eBay assumes no obligation to update such statements.
Cautionary Statement Regarding Forward-Looking Statements
This document includes "forward-looking statements" within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. All statements, other than statements
of historical facts, are forward-looking statements. These forward
looking statements address, among other things activities, events or
developments that we expect, believe or anticipate will or may occur in
the future, including our statements relating to the anticipated effects
of the proposed merger with eBay and its anticipated benefits if
consummated. These forward-looking statements are subject to a number of
risks that could cause actual results to differ materially from those
contained in the forward-looking statements, including the risk that our
stockholders may not approve the merger and that the regulatory
approvals and any other required approvals in connection with the merger
may not be obtained on the proposed terms or at the times anticipated,
as well as the risk factors described Item 1A of our 2010 Annual Report
on Form 10-K filed with the Securities and Exchange Commission (the
Currently unknown or unanticipated risks, or risks that emerge in the
future, could cause actual results to differ materially from those
described in forward-looking statements, and it is not possible for us
to predict all such risks, or the extent to which this may cause actual
results to differ from those contained in any forward-looking statement.
Except as required by law, we assume no obligation to update publicly
any such forward-looking statements, whether as a result of new
information, future events, or otherwise.
Important Merger Information
This communication may be deemed to be solicitation material in respect
of the proposed acquisition of GSI Commerce by eBay. In connection with
the proposed acquisition, GSI Commerce intends to file a proxy statement
on Schedule 14A with the Securities and Exchange Commission, or SEC, and
GSI Commerce and eBay intend to file other relevant materials with the
SEC. Stockholders of GSI Commerce are urged to read all relevant
documents filed with the SEC when they become available, including GSI
Commerce's proxy statement, because they will contain important
information about the proposed transaction. A definitive proxy statement
will be sent to holders of GSI Commerce stock seeking their approval of
the proposed transaction. This communication is not a solicitation of a
proxy from any security holder of GSI Commerce.
Investors and security holders will be able to obtain the documents
(when available) free of charge at the SEC's web site, http://www.sec.gov.
In addition, GSI Commerce stockholders may obtain free copies of the
documents filed with the SEC when available by contacting GSI Commerce's
Investor Relations at 610-491-7068.
Such documents are not currently available. You may also read and copy
any reports, statements and other information filed with the SEC at the
SEC public reference room at 100 F Street, N.E., Washington, D.C. 20549.
Please call the SEC at 1-800-SEC-0330 or visit the SEC's website for
further information on its public reference room.
GSI Commerce and its directors and executive officers, may be deemed to
be participants in the solicitation of proxies from the holders of GSI
Commerce common stock in respect of the proposed transaction.
Information regarding the directors and executive officers of GSI
Commerce is available in the 2010 Annual Report on Form 10-K, filed with
the SEC on March 1, 2011, and the proxy statement for GSI Commerce's
2010 Annual Meeting of Stockholders, filed with the SEC on April 13,
2010. Additional information regarding the interests of such potential
participants will be included in the proxy statement and the other
relevant documents filed with the SEC when they become available.
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eBay Inc. Corporate Communications
Inc. Investor Relations
Jennifer Ceran, 408-376-7493
Source: eBay Inc.
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