eBay Acquires GSI Commerce:No More Sports Gear
According to their press release, eBay Inc. has announced today that it will acquire GSI Commerce, a leading provider of e-commerce and interactive marketing services, for 2.4 billion dollars. The deal is expected to close by Q3 of 2011. GSI commerce is being offered around 50% higher than their normal closing price. John Donahoe, CEO of eBay said “We intend to lead the next generation of commerce innovation. The acquisition of GSI, offers the most comprehensive integrated suite of online commerce and interactive marketing services available [and] will significantly strengthen our ability to connect buyers and sellers worldwide…Combined with eBay Marketplaces and Paypal, we believe GSI will enhance our position as the leading strategic global commerce partner of choice for retailers and brands of all sizes.”
As part of the deal, eBay will demolish GSI’s licensed sports merchandise business and 70% of Shoprunner and Rue La La. For those who aren’t familiar with these brands, ShopRunner is an online commerce merchant that ships all orders for free, including returns. Rue La La is an exclusive, invitation-only marketplace where members find premier-brand, private sale Boutiques, which are open for just a brief period. As part of closing down GSI Commerce’s departments, eBay will loan the company $467 million dollars and take a 30 percent stake in Rue La La and Shoprunner. Sounds a bit like Monopoly, doesn’t it?
The press release continues to note that “Goldman, Sachs & Co. and Peter J. Solomon Company are acting as financial advisers to eBay, while Dewey & LeBoeuf LLP is acting as its legal adviser with regard to the transaction. Morgan Stanley & Co. Incorporated is acting as financial adviser to GSI Commerce and Davis Polk & Wardwell LLP is acting as legal adviser to the special committee of the GSI Commerce Board of Directors. Morgan, Lewis & Bockius LLP is acting as legal adviser to GSI Commerce.” At this point we are waiting to see who gets bought out next.