Internet auction site eBay announce today that it will acquire ecommerce platform provider and online marketer GSI commerce for $2.4 billion.
As part of the transaction, eBay said it will divest GSI’s licensed sports merchandise business – which includes newly acquired Fanatics – and 70% of ShopRunner and luxury flash sales site Rue La La. eBay believes these businesses are not core to its long-term growth strategy. Those assets will be sold to a newly formed holding company, which will be led by GSI founder and CEO Michael Rubin.
As part of the divesture, eBay will load the new holding company $467 million, and Rubin will invest $31 million in it.
John Donohoe, president/CEO of eBay, said in a press release that his company bought GSI Commerce for its ecommerce technology and interactive marketing services so eBay could strengthen its ability to connect buyers and sellers.
Forrester Research analyst Brian Walker says this is a good move for eBay, even if the value is not immediately evident, because it shifts eBay’s position as a services provider and partner within the ecommerce industry.
“GSI ultimately serves a small segment of larger retailers and consumer brands in a very diverse solutions market, and the acquisition of GSI and their marketing services gives eBay and PayPal access to many key brands that can support growth of PayPal’s multichannel payments solutions and eBay’s marketplace recovery,” Walker says.
The deal is expected to close in the third quarter, and allows GSI Commerce to solicit acquisition proposals from 30 days through May 6.
That may make certain law firms happy: Hours after eBay announced the deal, at least seven law firms announced they are investigating GSI Commerce because they feel the company and its board failed to properly shop a deal that would provide better shareholder value.
Ebay is paying $29.25 per share to acquire GSI Commerce, which eBay said is a 51% premium over GSI’s March 25 closing price and 47% higher than its common stock over the past 30 days.
But Dallas-based Kendall Law Group said it feels this undermines shareholders, since GSI Commerce closed at higher than that amount as recent as this past July.