EBay to sell its enterprise unit four years after buying it
- 17 July, 2015 00:49
EBay has reached a deal to sell its enterprise unit, a division focused on building and running online shopping sites for bricks-and-mortar retailers as well as provides marketing services, for less than half than it paid four years ago.
The US$925 million deal, announced Thursday, will give control of eBay Enterprise to a group of private equity firms led by Sterling Partners and Permira Funds, eBay said in a press release.
EBay acquired its enterprise unit, then called GSI Commerce, in June 2011, for $2.4 billion. The unit has more than 500 customers, including Dick's Sporting Goods, American Eagle Outfitters, Abercrombie & Fitch, PetSmart, Ikea and Major League Baseball. Many of those businesses compete for online sales with eBay itself.
The sale of eBay Enterprise was prompted by "increasingly divergent business opportunities" between the enterprise unit and the rest of eBay, a spokeswoman said by email.
GSI was founded in 1995 as a sporting goods seller and branched out into e-commerce in the 2000s.
The sale is an all-cash deal, the spokeswoman said. EBay expects the sale to close in the second half of this year, and eBay Enterprise to be renamed by early 2016.
Also on Thursday, eBay reported $4.4 billion in revenue for the second quarter of 2015, up from $4.1 billion a year earlier. Excluding one-time costs, net income was up 5 percent to $931 million.
The quarterly earnings report comes just four days before eBay will split off its PayPal Holdings business to a separate entity. PayPal's revenue for the quarter was $2.3 billion, up 16 percent from a year earlier.
Earnings per share was $0.76, beating analyst estimates by $0.03. The company's share price was up 4.7 percent in Thursday morning trading.
Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's email address is firstname.lastname@example.org.