California-based eBay announced that it has reached an agreement with global investment firm Permira, to sell nearly 125 million shares of its stake in Adevinta. The deal will be an estimated total of $2.25B (€1.9B)
According to the statement, the price represents an approx 7 per cent discount to the 10-day volume-weighted average price (VWAP) of Adevinta shares as of 12th July, and a 5 per cent discount to the 30-day VWAP as of 12th July.
The transaction is expected to close in Q4 2021, once regulatory approvals are secured. Also, with this development, eBay’s ownership stake in Adevinta will be reduced from 44 per cent to 34 per cent. Funds advised by Permira have agreed to acquire approximately 125 million shares in Adevinta from eBay, representing a 10.2 per cent ownership.
Additionally, eBay has also agreed to provide Permira a 30-day option to purchase approx 10 million additional shares at the same price for an additional $180M. If Permira goes through with this option, eBay’s ownership in Adevinta will reduce to 33 per cent.
Here’s the blow-by-blow account of the eBay Adevita deal
Last year in July, Adevinta, an online classifieds behemoth listed in Norway, announced that it has entered into a definitive agreement to acquire 100 per cent of eBay Classifieds Group, the global classifieds arm of eBay Inc, for $9.2B.
Under the terms of this agreement, eBay was to receive US$2.5B (approx €2.11B) in cash and 540 million shares of Adevinta, representing a 44 per cent stake in pro forma Adevinta (the “combined entity”). Adevinta will issue eBay voting shares representing 33.3 per cent of the total voting rights, and new class of non-voting shares for the remainder of its 44 per cent stake.
However, this deal was obstructed by the Austrian Federal Competition Authorities over competition concerns. According to the regulatory body, “AFCA’s investigation into the acquisition of the minority shareholding found that it would be disadvantageous for Austrian users of online platforms for private sales (e.g. willhaben.at and ebay.at) as it would minimise mutual competitive pressure.”
“The examination of the merger has shown that eBay and willhaben are in close competition for Austrian users, particularly in relation to online consumer-to-consumer sales (C2C transactions),” it further adds.
Adevinta holds shares in willhaben.at (willhaben internet service GmbH & Co KG) and shpock.at (finderly GmbH). Austria-based willhaben is an advertising marketplace, whereas Shpock is a marketplace and classifieds platform.
As part of its investigation, AFCA also conducted an online market survey to “obtain a better understanding of the market as the basis for further analysis of the impact on competition.”
It sent an invitation to a number of randomly selected users of Ebay.at, WillHaben.at and Sphock.at to take part in the online survey. According to the AFCA, the results of this survey also confirmed that willhaben and eBay in particular are in close competition with each other.
In order to allay the competition concerns, Adevinta and eBay proposed some measures, which were approved by the AFCA last month. The measures include “a reduction by eBay of its financial interest in Adevinta to at least 33 per cent within 18 months following closing of the transaction, so as to reduce its indirect economic interest in Willhaben. Additionally, Adevinta has agreed to prevent the flow of information about Willhaben to eBay, as well as to restrict eBay’s potential influence over the strategic operations of Willhaben.”
After receiving the final regulatory approval, last month, Adevinta finally announced that it has completed its acquisition of eBay Classifieds Group, thereby allowing Permira to buy stakes in Adevinta from eBay.
It is a global online classifieds specialist, operating digital marketplaces in 16 countries. The company provides technology-based services to connect buyers with sellers and to facilitate transactions, from job offers to real estate, cars, and consumer goods, among others.
Adevinta’s portfolio comprises more than 40 digital brands that cover one billion people and attract nearly three billion average monthly visits. Some of these include Leboncoin in France; Germany’s classifieds sites mobile.de and eBay Kleinanzeigen; Marktplaats in the Netherlands; Kijiji in Canada; fotocasa and InfoJobs in Spain; and 50 per cent of OLX Brasil.
The company is spun off from Schibsted ASA and publicly listed in Oslo, Norway, in 2019. Currently, it employs nearly 7,000 people.
Founded in 1985, Permira is a private equity firm that focuses on growth at scale. It advises funds with total committed capital of about $50B (approx €44B) and makes long-term majority and minority investments. To date, Permira funds have made over 250 private equity investments in four key sectors including technology, consumer, services and healthcare.
With the recent development, the firm will be representing a 10.2 per cent ownership in Adevinta. Also, once the deal is closed, Permira Partner and Head of Consumer, Dipan Patel, will join the Board of Directors of Adevinta.
On this development, Dipan Patel says, “We have long been admirers of Adevinta and are delighted to make this investment. Adevinta is home to some of the world’s most iconic online classifieds brands, combining growth, scale, margin and economic resilience. With leading positions in 16 countries covering one billion consumers, the Company is situated right at the heart of the rapidly transforming auto, real estate and jobs end markets, as well as the acceleration of sustainable commerce through its horizontal platforms.”
The company has over 350 people working from 15 offices across Europe, North America, and Asia. Some of its portfolio companies include Allegro, Mirakl, TeamViewer, Klarna, LegalZoom, Flixbus, Ancestry, Catawiki, Boats Group, The Knot Worldwide, BestSecret, Zwift and Magento, among others.