eBay’s sale of its classifieds business creates global leader
This includes separate online marketplaces such as Gumtree, which is popular in SA, the UK and Australia
eBay has agreed to sell its online classifieds business to Adevinta for $9.2bn, ending one of the largest auctions of the year.
The Norwegian digital marketplace owner, now the largest business in that sector globally, is already looking ahead to its next deal.
The tie-up means eBay will get $2.5bn of cash and 540-million shares in the Norwegian firm, the companies said in a statement on Tuesday. Shares in Adevinta rose as much as 39%.
Adevinta beat out Naspers’s Prosus and a private equity consortium that included Blackstone Group, Permira and Hellman & Friedman, which had also been pursuing the unit, people familiar with the matter had said.
The bid from Oslo-based Adevinta, which operates a number of online marketplaces across Europe and Latin America, got a surprise boost because eBay wanted to keep a significant stake in the business, people said.
While Adevinta CEO Rolv Erik Ryssdal is focused on closing the deal, he said he has his eye on the next acquisition. The company used new debt and its existing cash to fund the deal, taking out a $3bn bridge loan to refinance its existing borrowings and cover transaction and financing fees. It said it expects to “de-lever quickly” as earnings expand.
“There are other players in the industry that also would be very welcome in this family,” he said in a phone interview on Tuesday. “That’s more realistic in the medium term. But certainly, there are opportunities to extend the family even further.”
The deal, Norway’s biggest in more than a decade, will significantly boost the size of Adevinta, which was spun off from Scandinavian media conglomerate Schibsted last year. Ryssdal, who’s been charged with expanding the company, said in an interview last week that the industry has seen a surge in demand for online shopping, buoyed by the Covid-19 lockdowns.
eBay has been under pressure from activist investors Starboard Value and Elliott Management to sell assets and focus on its main online marketplace, eBay.com. In 2019, the company agreed to appoint two new directors from Starboard and Elliott, and the shareholders stepped up pressure to divest noncore assets. The same year Devin Wenig stepped down as CEO after balking at the sales.
eBay reported strong results in its more recent quarter thanks to a boost from consumers shopping online, but the classified business suffered because the pandemic forced the shuttering of thousands of car dealerships.
San Jose-based eBay will become Adevinta’s biggest shareholder and will be entitled to two seats on its board.
“I’m very happy to have eBay as a shareholder,” said Ryssdal. “If we can collaborate more with them and extend the collaboration, that’s something that I would very happily explore.” Adevinta’s expertise in the property sector could be applied to some of eBay’s assets, he said.
eBay’s classifieds business includes separate online marketplaces such as Kijiji, which is used in Canada and Italy, and Gumtree, which is popular in the UK, Australia and SA. It also owns Bilbasen, a Danish online vehicle marketplace, and British car search website Motors.co.uk. They’ll be added to Adevinta’s portfolio, which includes shopping app Shpock, vacation reservation site Locasun and job hunting platform InfoJobs.
eBay said in February it was in active talks with multiple parties about a potential deal for its classifieds business. The company in November sold StubHub, an online marketplace for concert and sporting event tickets, to Switzerland-based rival Viagogo for $4bn.
Would you like to comment on this article or view other readers' comments?
Register (it’s quick and free) or sign in now.
Please read our Comment Policy before commenting.