EBay Inc. (Nasdaq: EBAY) said it plans to acquire GSI Commerce (Nasdaq: GSIC) for $29.25 a share, or about $2.4 billion.
GSI (www.gsicommerce.com) provides e-commerce and interactive marketing services to more than 180 brands and retailers including outdoor and fitness companies Adidas, Eastern Mountain Sports, Quicksilver, Timberland, Dick’s Sporting Goods, and Sports Authority. The King of Prussia, Pa.-based company, which employs 5,200 people, reported annual revenue of $1.36 billion and a loss of $36.5 million in 2010.
The proposed acquisition, announced March 27, represents a 51 percent premium over GSI’s March 25 closing price. The deal is expected to close in the third quarter 2011, but GSI may also solicit acquisition proposals from third parties through May 6.
“We intend to lead the next generation of commerce innovation,” eBay President and CEO John Donahoe said in a press release. “Technology is changing how consumers shop, and retailers and brands are changing how they compete. With eBay, PayPal, GSI and our global platform capabilities, we are focused on delivering new ways for retailers and brands of all sizes – from sole proprietors to large merchants – to drive innovation, engage customers and help people shop anytime, anywhere and on any device.”
San Jose, Calif.-based eBay won’t hang on to all of GSI’s current customers. As part of the transaction, the company pans divest 100 percent of GSI’s licensed sports merchandise business, which include clients such as the NFL, NBA, NHL, Major League Baseball, ESPN Shop, and San Francisco 49ers. EBay also will sell off 70 percent GSI’s ShopRunner – a membership free-two-day-shipping service -- and Rue La La – a membership sale-alert service.
A new holding company, led by GSI founder and CEO Michael Rubin, plans to purchase the above divestitures, with the help of a $467 million loan from eBay. EBay officials said they expect this portion of the deal to result in financial benefits of approximately $60 million by 2013.
GSI was founded as Global Sports Inc. in 1999 and became GSI Commerce Inc. in 2002 as it broadened its e-commerce and marketing services beyond sports brands.
--Compiled by David Clucas