EBay Inc. (EBAY) said it will buy ecommerce company GSI Commerce
Inc. (GSIC) for about $2 billion as the online-auction giant looks
to boost its PayPal online-pay operation and eBay Marketplace
service.
According to terms of the deal, eBay will pay GSI shareholders
$29.25 for each of their shares--a 51% premium over the company's
closing price on Friday. The deal includes a "go-shop" period
during which GSI can solicit other offers through May 6, though
eBay has the right to match a superior proposal.
EBay said the total consideration for the deal, including debt,
is $2.4 billion.
EBay said assuming the acquisition closes mid-third quarter, the
deal isn't likely to affect its full-year adjusted earnings
forecast, while it will hurt GAAP earnings to the tune of 30 cents
to 34 cents a share.
GSI shares were recently up 51.4% to $29.35, while shares of
eBay were recently down 2.6% to $30.88.
The acquisition of GSI, which develops and operates ecommerce
businesses for retailers and other organizations, "will
significantly strengthen our ability to connect buyers and sellers
worldwide," said eBay President and Chief Executive John Donahoe.
"Combined with eBay Marketplace and PayPal, GSI will enhance our
position as the leading strategic global commerce partner of choice
for retailers and brands of all sizes."
EBay said it sees cost savings of about $60 million by 2013
because of the deal.
-By Nathan Becker, Dow Jones Newswires; 212-416-2855;
nathan.becker@dowjones.com