Online Writers/Business Editors/Retail Writers
SAN JOSE, Calif.
--(BUSINESS WIRE)--
--
eBay Inc.
(NASDAQ:EBAY) today announced that it has reached a definitive agreement to acquire Bill Me Later®, the number two online-oriented payments brand, for approximately
in cash and approximately
worth of outstanding options, net of option exercise proceeds. The acquisition extends the companyâs leadership in payments by combining Bill Me Later with eBayâs
PayPal
, the number one online-oriented payments brand. Subject to various closing conditions, the deal is expected to be completed by year-end.
âBill Me Later is a perfect complement to our portfolio;
PayPal
and Bill Me Later belong together,â said
John Donahoe
, eBay Inc.âs president and chief executive officer. âWe now have a powerful combination of the two leading, complementary online payment products, each with proven benefits for consumers and online merchants. At an attractive valuation, our investment in Bill Me Later opens significant long-term growth opportunities.â
The deal offers strong synergies within the
eBay
portfolio. Bill Me Later can offer its deferred payments and promotional financing service to the tens of millions of customers who use
eBay
and
PayPal
.
PayPal
expands its customer base to approximately 1,000 of the most popular Web sites and to the millions of online shoppers who use Bill Me Later.
âBill Me Later is a fabulous business, and the opportunity that
eBay
,
PayPal
and Bill Me Later have together is nothing short of tremendous,â said
Scott Thompson
, president of
PayPal
, who will oversee both businesses. âBy combining the best of
PayPal
and Bill Me Later, we can offer an even stronger service for consumers and merchants.â
Together,
PayPal
and Bill Me Later can better meet consumersâ needs both on and off
eBay
by allowing them to quickly, safely and easily purchase the items they want online and pay for them immediately or over time. With one payment relationship, retailers and
eBay
sellers can offer two of the Webâs most innovative payment methods, which have been proven to increase sales and deliver higher average selling prices for merchants.*
Founded in 2000 by a team of seasoned professionals in the payments industry, Bill Me Later enables online retailers to offer transactional credit to consumers at the point of sale. With its sophisticated underwriting techniques and credit decision model, Bill Me Later provides approval decisions for shoppers within seconds without requiring them to complete detailed application forms.
Bill Me Laterâs credit risk modeling and analysis have consistently performed better than the consumer credit industry average. Combined with eBayâs and PayPalâs best-in-class transactional data monitoring, this expertise will bolster the companyâs ability to drive down risk in the payment system and provide customers with even safer, faster ways to pay online.
âPayPal and Bill Me Later have a similar vision to dramatically streamline and improve the experience for customers shopping online,â said
Gary Marino
, chief executive officer of Bill Me Later. âThis deal helps us to accelerate that vision by offering our products to millions of customers who already use
eBay
and PayPal.â
Marino will continue to run Bill Me Later as a business unit of
PayPal
and will report to Thompson as part of the
PayPal
senior executive team.
âThis deal makes perfect sense,â said
Bruce Cundiff
, director of payments research and consulting for Javelin Strategy & Research. âBill Me Later has adoption among the most popular large merchants on the Web, and
PayPal
is the way that many small merchants and
eBay
sellers accept payments online. Together, they can extend the presence of the two brands and offer even more choice for consumers when they shop online.â
Transaction and Financial Information
eBay
will acquire all of the outstanding shares of capital stock and warrants to purchase capital stock of privately-held Bill Me Later for approximately
. In addition, at closing
eBay
will assume all outstanding Bill Me Later employee options which have a current value of approximately
, net of option exercise proceeds.
eBay
plans to finance the acquisition and receivables with a combination of cash and available financing resources including eBayâs existing line of credit. The acquisition is subject to various customary closing conditions and is expected to close in the fourth quarter of 2008.
eBay
anticipates that Bill Me Later will generate an estimated
in revenue in 2009. For the fourth quarter of 2008,
eBay
expects the acquisition to be dilutive to non-GAAP and GAAP earnings per share by
and
, respectively. For the full year 2009,
eBay
expects the transaction to be dilutive to non-GAAP and GAAP earnings per share by
and
, respectively.
eBay
expects the deal to be accretive in 2011. For more information on how non-GAAP financial measures are calculated, please refer to eBayâs second quarter earnings release issued on
.
eBay Inc.
will host an investor conference call today at
to discuss this announcement. A live webcast of the conference call can be accessed through the eBay Investor Relations Web site at
http://investor.ebay.com
. An archive of the webcast will be accessible through the same link.
About
eBay
Founded in 1995,
eBay Inc.
connects hundreds of millions of people around the world every day, empowering them to explore new opportunities and innovate together.
eBay Inc.
does this by providing the Internet platforms of choice for global commerce, payments and communications. Since its inception,
eBay Inc.
has expanded to include some of the strongest brands in the world, including
eBay
,
PayPal
,
Skype
, StubHub, Shopping.com, and others.
eBay Inc.
is headquartered in
San Jose, Calif.
About
PayPal
PayPal
is the faster, safer way to pay and get paid online. The service allows anyone to pay without sharing financial information and gives consumers the flexibility to pay in any way they prefer, including through credit cards, bank accounts or account balances. With more than 62 million active accounts in 190 markets and 19 currencies around the world,
PayPal
enables global ecommerce.
PayPal
is an
eBay
company. More information about the company can be found at
https://www.paypal.com
.
About
Bill Me Later, Inc.
Bill Me Later, Inc.
is a leader in the digital payments industry with its popular Bill Me Later® product and flexible financing programs. The rapidly growing Bill Me Later network enables top-tier retailers and travel providers to offer an effortless payment experience to high value customers. In the small business sector,
Bill Me Later, Inc.
is pioneering payments with the Bill Me Later® Business service tailored specifically for the small business buyer.
The Bill Me Later, Inc.
network includes hundreds of top-tier merchants including
AirTran
, Apple,
Borders
,
Bluefly
,
Continental Airlines
, eLUXURY,
Fujitsu
, JetBlue,
Toshiba
, Toys âRâ Us,
US Airways
, Walmart.com and Zappos. Millions of consumers rely on the safety and convenience of Bill Me Laterâs payment solutions when shopping online, via phone and in-store. Founded in 2000,
Bill Me Later, Inc.
is a privately held company headquartered in
Timonium, Md.
with additional office locations in
Hunt Valley, Md.
and
San Francisco
. For more information, visit
www.billmelater.com
.
Forward Looking Statements
This announcement contains forward-looking statements relating to eBayâs future performance that are based on its current expectations, forecasts and assumptions. Those statements involve risks and uncertainties, and actual results may differ materially from those discussed. Factors that could cause or contribute to such differences include, but are not limited to, the receipt and timing of regulatory approval for the transaction; the possibility that the transaction may not close; the reaction of consumers and Bill Me Laterâs customers; downturns in the financial markets and the credit industry; the future growth of Bill Me Later; the reaction of competitors to the transaction; the possibility that integration following the transaction may be more difficult than expected; the increasing need to grow revenues from existing users in established markets; an increasingly competitive environment for eBayâs businesses; the complexity of managing a growing company with a broad range of businesses; the companyâs need to manage regulatory, tax, IP and litigation risks (including risks specific to
PayPal
and the financial industry); the need to upgrade technology and customer service infrastructure at reasonable cost while adding new features and maintaining site stability; foreign-exchange-rate fluctuations; changes in political, business, and economic conditions; the companyâs ability to profitably expand its business model to new types of merchandise and sellers; and the impact and integration of recent and future acquisitions.
More information about factors that could affect eBayâs operating results can be found in the companyâs most recent annual report on its Form 10-K and its subsequent quarterly reports on Form 10-Q (available at
http://investor.ebay.com
). All forward-looking statements are based on information available to
eBay
on the date hereof, and
eBay
assumes no obligation to update such statements.
* Bill Me Later consumers have 28-46 percent higher repeat usage than other payment offerings, according to Javelin Strategy & Research (2006). Merchants offering promotional financing with buyer credit on
eBay
saw an increase in average selling prices ranging from 50-250 percent depending on the type of promotion they offered (
eBay
study, 2006). A study conducted by
Northstar Research Partners
commissioned by
PayPal
showed that 56 percent of users are likely to purchase from a retail site if a deferred payment option is available.
PayPal Inc.
Sara Gorman
, 408-204-9015 (Media)
sgorman@paypal.com
or
Bill Me Later
Sara Parker
, 443-921-1820 (Media)
sara.parker@billmelater.com
or
eBay Inc.
Tracey Ford
, 408-376-7205 (Investor)
tford@ebay.com
State Keywords:
California
Industry Keywords: Technology; Online Retail; Internet; Professional Services; Banking; Retail
Source:
eBay Inc.
