Adevinta agrees $9.2bn deal to acquire eBay Classifieds Group

October 2020 | DEALFRONT | MERGERS & ACQUISITIONS

Financier Worldwide Magazine

October 2020 Issue

In a $9.2bn deal which will create the world’s largest online classifieds group with an extensive footprint and leading marketplace brands, Norway-based marketplace specialist Adevinta ASA is to acquire eBay Classifieds Group, the global classifieds arm of eBay Inc.

Under the terms of the agreement, eBay will receive $2.5bn in cash and 540 million Adevinta shares. Post transaction, eBay will own a 44 percent stake in pro forma Adevinta, based on the number of Adevinta fully diluted shares as of the end of the second quarter, of which 33.3 percent are voting shares and the remainder are non-voting shares.

An acquisition with significant synergy potential, the combined entity will benefit from a balanced portfolio of assets centred around Germany, France and Spain. In Europe in particular, the combination will create a leading marketplace provider enabling synergies for consumers and customers, as well as for the combined entity itself.

Furthermore, the combination is expected to de-lever quickly through a combination of strong earnings before interest, taxes, depreciation and amortisation (EBITDA) growth and high cash conversion.

“With the acquisition of eBay Classifieds Group, Adevinta becomes the largest online classifieds company globally, with a unique portfolio of leading marketplace brands,” said Rolv Erik Ryssdal, chief executive of Adevinta. “We believe the combination of the two companies, with their complementary businesses, creates one of the most exciting and compelling equity stories in the online classifieds sector.”

“Our close cultural alignment with eBay Classifieds Group will allow us to pursue a shared vision,” he continued. “We look forward to a smooth integration, welcoming eBay Classifieds Group employees to the Adevinta family.”

With eBay Classifieds Group operating an international family of leading local classifieds marketplaces in 13 countries and Adevinta bringing its portfolio of leading digital marketplaces in 15 countries, the transaction will create a globally scaled, pure-play online classifieds leader which covers a population of one billion people and receives around three billion monthly visits.

“We are pleased that we reached an agreement with Adevinta that brings together two great companies,” said Jamie Iannone, chief executive of eBay Inc. “eBay believes strongly in the power of community and connections between people, which has been essential to our Classifieds businesses globally. This sale creates short-term and long-term value for shareholders and customers while allowing us to participate in the future potential of the Classifieds business.”

Adevinta’s board of directors unanimously supports the transaction, which is expected to deliver long-term value creation for all shareholders. Closing of the transaction is expected by Q1 2021, subject to shareholder approval in Adevinta and customary regulatory and closing conditions.

Acting as financial adviser to Adevinta is Citigroup. Skadden and BAHR are acting as corporate legal counsel and Cleary Gottlieb Steen & Hamilton as antitrust counsel. Goldman Sachs and LionTree were financial advisers to eBay. Wachtell, Lipton, Rosen & Katz provided corporate legal counsel, and Quinn Emanuel Urquhart & Sullivan provided antitrust counsel.

Alessandro Coppo, senior vice president and general manager at eBay Classifieds Group concluded: “This deal is a testament to the growth and potential of the eBay Classifieds business – we are excited for our local classifieds brands to join Adevinta and shape a global leader in an industry full of potential.”

Fraser Tennant