San Jose, California, February 21, 2001 - In a move that redefines European online trading, eBay Inc. (NASDAQ: EBAY; www.ebay.com), the world's online marketplace, today announced that it has agreed to acquire iBazar S.A. (www.iBazar.com), a pioneer in online auction-style trading in Europe. The acquisition of iBazar, combined with eBay's current strength in key European markets, will firmly solidify eBay's position in Europe and significantly strengthen eBay's global marketplace. Europe's total e-commerce revenues in 2000 topped $80 billion, according to projections by Forrester Research. Estimates cite European Internet users as the source of half of the world's e-commerce spending outside the U.S.
"This deal is a tremendous step forward for eBay," said Meg Whitman, President and CEO, eBay Inc. "In one strategic move we have increased our pan-European footprint, as well as the strength of our global trading community. Today we are much closer to realizing our dream of a marketplace where people anywhere on the planet can seamlessly trade almost anything."
Based in Paris, iBazar introduced online person-to-person trading in France when it launched in October 1998. Today, it features online marketplaces in eight countries: Belgium, Brazil, France, Italy, the Netherlands, Portugal, Spain, and Sweden. iBazar has a total of 2.4 million registered users, and during the fourth quarter of 2000, it reported more than 3.1 million listings and gross merchandise sales (GMS) of more than $95 million. Based on GMS and reach, iBazar is considered to have the leading sites in all of its markets except for Sweden.
"We have built iBazar into Europe's best auction web site," said Pierre-François Grimaldi, President and Founder, iBazar S.A. "Taking it to the next level will be easier by becoming part of a larger company. It was especially important to find a partner that shares our online trading philosophy. There is no better partner in the Internet space than eBay."
eBay is currently in nine international markets, including the United Kingdom, Germany, Austria, France, Italy, Canada, Australia, Japan, and Korea. In its existing European marketplaces, during the fourth quarter of 2000, eBay users generated over $137 million in gross merchandise sales. Based on GMS and reach, eBay is currently the leading online marketplace in the U.K., Germany, Canada, Australia, and Korea.
The acquisition, which will be accounted for as a purchase business combination, is subject to various shareholder, government and regulatory approvals and is expected to close in the second quarter of 2001. As consideration for 100 percent of the outstanding shares of iBazar, eBay will issue approximately 2.25 million shares of common stock, subject to a minimum valuation of $66 million and a maximum valuation of $112 million, based on the value of eBay stock at closing. Based on very preliminary estimates, the recognized purchase price is also expected to include approximately $6 million for acquisition-related costs. The Company anticipates that the calculation of goodwill will also include approximately $30 million associated with the assumption of any closing date net liabilities. The calculation of the final purchase price and goodwill may vary significantly from these estimates, and will depend upon a number of factors, including the length of time necessary to close the transaction and the results of iBazar's operations for the period prior to the close.
The acquisition is expected to have a nominal impact on eBay's 2001 revenues. On a pro forma basis, excluding amortization of goodwill and other acquired intangible assets, eBay's 2001 full year net income per share is expected to decrease by four cents, with the largest impact occurring in the first full quarter subsequent to the acquisition.
eBay is the world's largest online trading community. Founded in 1995, eBay created a powerful marketplace for the sale of goods and services by a passionate community of individuals and small businesses. On any given day, there are millions of items for sale on the site across thousands of categories. eBay enables trade on a local, national and international basis with local sites in 60 markets in the U.S. and country specific sites in the United Kingdom, Canada, Germany, France, Italy, Austria, Korea, Japan and Australia. With the acquisition of Half.com in July 2000, eBay's community now benefits from a marketplace combining traditional auction and fixed-price trading.
iBazar is one of the leading Internet auction sites in Europe with 2.4 million registered users across the eight countries in which it operates. iBazar is the leading online auction site in France, Italy, Spain, Brazil, the Netherlands, Belgium and Portugal, and the second in Sweden. iBazar's first web site was launched in France in October 1998, and the group's international expansion began one year later. Approximately 70% of iBazar's users are now located outside France.
Forward Looking Statement
This announcement contains forward-looking statements that involve risks and uncertainties. Actual results could differ materially from those discussed. Factors that could cause or contribute to such differences include, but are not limited to, the receipt and timing of government and regulatory approvals for the transaction, the possibility that the transaction will not close, the reaction of the users and suppliers of each service to the transaction, the future growth of the iBazar services and the reaction of competitors to the transaction. Additional risk factors include, employee retention and maintenance of the business of iBazar during the period until the closing of the transaction and thereafter; the need to coordinate strategy and resources between the two companies, as well as the potential integration of each company?s accounting, management information, human resource and other administrative systems to permit effective management. Factors related to international expansion that could cause or contribute to such differences include, but are not limited to, foreign currency exchange rates fluctuation, and regulatory, political and economic conditions in France and other areas of Europe and South America in which iBazar operates. More information about potential factors which could affect eBay's business and financial results is included in eBay's Form 10-Q for the period ended September 30, 2000 under the headings "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and results of Operations," its current report on form 8-K filed on January 16, 2001, and the report to be filed in connection with this announcement. All forward-looking statements are based on information available to eBay and iBazar on the date hereof, and neither company assumes any obligation to update such statements.