Norway’s Adevinta buys eBay’s classifieds unit in $9.2b deal

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U.S. firm eBay Inc has agreed to sell its classified ads business to Norway’s Adevinta in a deal worth $9.2 billion, creating the world’s largest classifieds group, the companies said on Tuesday.

Under the deal, eBay will receive $2.5 billion in cash and 540 million shares of Adevinta, making it the largest shareholder with a 44% stake and 33.3% of the vote, they said.

“Adevinta becomes the largest online classifieds company globally, with a unique portfolio of leading marketplace brands,” Adevinta Chief Executive Rolv Erik Ryssdal said.

The combined company will have a presence in 20 countries, with Europe its biggest market. It will have estimated revenue of $1.8 billion and earnings before interest, tax, depreciation and amortisation (EBITDA) close to $600 million.

A source close to the deal said the Norwegian firm sweetened terms of its bid at the weekend by offering eBay a bigger stake, after the U.S. firm’s board was initially split, with some members backing a $9 billion cash bid by online retailer Prosus.

Jamie Iannone, eBay‘s chief executive, backed Adevinta’s proposal and persuaded the board of its merits, the source said.

Ryssdal told Reuters the coronavirus crisis had boosted digital marketplaces, with some Adevinta sites receiving more traffic in June than a year earlier, rebounding from a sharp drop in March.

Ryssdal, who said he intended to stay in the chief executive role, said Adevinta would look for more acquisitions after completing the eBay deal, adding the combined company “would be a great platform to do that.”

Shares in Adevinta, which was spun out of Nordic media company Schibsted and listed on the Oslo bourse last year, jumped almost 40% after trading resumed. Schibsted shares climbed about 20%.

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Adevinta owns brands such as Leboncoin, France’s biggest online classified ads website, Brazil’s OLX and dozens more across Europe, the Americas and North Africa.

The eBay Classifieds Group includes the Gumtree and Kijiji brands, and offers online ads to more than 1,000 cities around the world. The business posted an operating income of $83 million on revenue of $248 million in the first quarter of 2020.

The transaction, expected to close by the first quarter of 2021, targets $150 million-$185 million in annual savings on EBITDA within three years.

Most of the synergies are expected to come from IT, where eBay is much stronger, a person familiar with the deal said.

Schibsted said the deal meant its stake in Adevinta would fall to about 33% from 59%, but it would have 39.5% of votes.

Schibsted and eBay will appoint two directors each to the expanded board of nine, Adevinta’s investor presentation showed.

Schibsted Chief Executive Kristin Skogen Lund told a presentation her firm intended to remain a significant shareholder in Adevinta but might sell part of its stake if it made further acquisitions.

“We will have a larger liquidity and financial flexibility, but that doesn’t mean that we have any immediate plans (to sell),” she said.

As part of Adevinta deal, the U.S. firm agreed to sell Schibsted the Danish assets of eBay classifieds group for $330 million, reducing the cash consideration from Adevinta to about $2.17 billion.

Citigroup advised Adevinta, while Barclays acted as lead financial advisor to Schibsted. Goldman Sachs and LionTree advised eBay.

Reuters

 

Singapore Reporter/s

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.