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Deal creates the world’s largest online classifieds group with an extensive footprint and leading marketplace brands
Oslo, 21 July 2020 - Adevinta ASA (ADE) (“Adevinta” or the “Company”), announces today that it has entered into a definitive agreement to acquire 100% of eBay Classifieds Group, the global classifieds arm of eBay Inc (“eBay”), for a headline value of c. US$9.2 billion5. Under the terms of the agreement, eBay shall receive US$2.5 billion in cash6 and c. 540 million shares of Adevinta, representing a 44% stake in pro forma Adevinta (the “combined entity”). Adevinta will issue to eBay (i) voting shares representing c. 33.3% of the total voting rights, and (ii) new class of non-voting shares for the remainder of its 44% stake.
eBay Classifieds Group operates an international family of leading local classifieds marketplaces in 13 countries. Adevinta brings its portfolio of leading digital marketplaces in 15 countries, along with a track record of profitable high growth and continuous focus on delivering value to its users, customers and shareholders. The transaction creates a globally scaled, pure-play online classifieds leader which covers a population of one billion people and receives around three billion monthly visits.
The combined entity will benefit from a balanced portfolio of assets centered around Germany, France and Spain. In Europe in particular, the combination will create a leading marketplace provider enabling synergies for our consumers and customers, as well as for the combined entity itself.
The management teams of Adevinta and eBay Classifieds Group share a set of strategic principles developed through a common history of acquiring and scaling generalist marketplaces and successfully verticalising them to create value. The breadth of talent across the companies and the collective experience across the combined portfolio will serve to optimise strategies for the various assets at different stages of development, accelerating monetisation and creating value for consumers and advertisers.
The enlarged scale of the proposed combination will enable greater focus, investment and efficiency in areas such as:
Thanks to its scale and footprint, the combined business will be ideally positioned to participate in the ongoing consolidation of the global online classifieds industry.
Rolv Erik Ryssdal, CEO of Adevinta, said, “With the acquisition of eBay Classifieds Group, Adevinta becomes the largest online classifieds company globally, with a unique portfolio of leading marketplace brands. 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.
“We have been impressed with eBay Classifieds Group’s achievements in recent years, leading across markets with nationally recognized brands including Mobile.de, Gumtree, Marktplaats, dba, Bilbasen, Kijiji, 2dehands, 2ememain, Vivanuncios, Automobile.it, Motors.co.uk, Autotrader (Australia), Carsguide (Australia), and eBay Kleinanzeigen, and innovating consistently across its product portfolio and advertising technology platform.
“This transaction demonstrates we are swiftly executing on the strategy we outlined at our IPO last year, and it brings further diversification through exposure to new markets with attractive margins and strong growth potential. Our close cultural alignment with eBay Classifieds Group will allow us to pursue a shared vision. We look forward to a smooth integration, welcoming eBay Classifieds Group employees to the Adevinta family.”
Jamie Iannone, CEO of eBay Inc, said, “We are pleased that we reached an agreement with Adevinta that brings together two great companies. 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.”
“This deal is a testament to the growth and potential of the eBay Classifieds business,” said Alessandro Coppo, SVP and GM, eBay Classifieds Group. “We are excited for our local classifieds brands to join Adevinta and shape a global leader in an industry full of potential.”
“Schibsted’s Board of Directors and management strongly support the agreement between Adevinta and eBay, as we are confident that it will further strengthen the value creation potential for Schibsted and the rest of Adevinta’s shareholders. Schibsted intends to continue to contribute to the value creation for all Adevinta shareholders as a significant long-term anchor shareholder,” said Kristin Skogen Lund, CEO of Schibsted.
The transaction offers significant synergy potential, with ambition of approximately US$150-185 million of run-rate EBITDA contribution expected to be achieved by year three post completion of the transaction. Cost synergies are expected to represent two thirds of the total amount and will be primarily derived from product, technology and IT efficiencies, as well as the deduplication of certain functions across the two organizations. Additional synergies include opportunities to accelerate transactional service roll-out, advertising platform efficiencies and further products enhancements. The synergy realisation is expected to give rise to pre-tax one-time integration costs of c. US$125 million, to be incurred over the first three years following completion of the transaction.
Summary Terms of Transaction
Adevinta is acquiring eBay Classifieds Group for a headline value of c.US$9.2 billion7. eBay will receive US$2.5 billion cash8 and c. 540 million Adevinta shares. Post transaction, eBay will own a 44% stake in pro forma Adevinta, based on the number of Adevinta fully diluted shares as of the end of the second quarter, of which c. 33.3% are voting shares and the remainder are non-voting shares.
The cash portion of the purchase price will be financed with new debt and cash on Adevinta’s balance sheet. Adevinta has a commitment for a secured bridge term facility for c. US$3.0 billion euro equivalent. The bridge term facility will be also used to fully refinance Adevinta’s existing debt and cover the financing and transaction fees. In addition, Adevinta has a commitment for the full refinancing of its existing €400 million revolving credit facility.
IIt has also been agreed that Schibsted shall acquire eBay Classifieds Group’s Denmark assets for US$330 million on a debt- and cash-free basis, in turn reducing the cash consideration from Adevinta to approximately US$2.17 billion.
The combined entity is expected to de-lever quickly through a combination of strong EBITDA growth and high cash conversion.
At transaction closing, Adevinta will issue to eBay ordinary shares representing one-third of the total number of issued and outstanding voting shares. Separately, a class of non-voting shares will be created and issued to eBay, which will be exchangeable to voting shares on a one-for-one basis so long as eBay does not hold voting shares in excess of one-third of the total.
Shareholders holding at least 25% of the voting shares in Adevinta (including eBay and Schibsted) shall be entitled to appoint two directors to the Board of Adevinta, one representative to the company’s nomination committee and one member of Board committees. Shareholders holding at least 10% of the voting shares in Adevinta shall be entitled to appoint one director to the Board. The aggregate number of directors appointed pursuant to the foregoing shall however not exceed six, and the majority of the Board of Adevinta shall always be elected by Adevinta’s general meeting. On closing of the transaction, the size of the Board is expected to increase to nine, allowing eBay and Schibsted to appoint two directors each.
As part of the transaction, eBay and Schibsted shall have certain information and cooperation entitlements. Further, as part of the transaction, eBay, Schibsted and Adevinta have agreed to certain regulations on realisation of shares in Adevinta, including an initial lock-up of three months (except sales of Non-voting Shares off market) and a subsequent 12-month period with certain restrictions on sale of shares to competitors, as well as priority and tag-along rights in connection with realisation of shares.
Conditions and shareholder approval
Closing of the transaction is expected by Q1 2021 and is subject to eBay Classifieds Group Dutch Works Council approval, regulatory approvals and customary closing conditions. Certain aspects of the transaction are also subject to shareholder approval in Adevinta, including issuance of the consideration shares to eBay, implementation of new governance rights and election of eBay nominees to the company’s board of directors. The company’s board will call for an extraordinary general meeting within the near term.
The transaction agreement includes customary representations, warranties and obligations, including that Adevinta on certain terms and conditions shall pay a termination fee equal to 1% of the transaction value to eBay if the transaction does not close.
In connection with closing of the transaction, Adevinta will publish a listing prospectus for the listing of the new shares issued to eBay on the Oslo Stock Exchange.
Advisors to Adevinta, Schibsted and eBay
Citigroup acted as financial advisors to Adevinta. Skadden and BAHR are acting as corporate legal counsel, and Cleary Gottlieb Steen & Hamilton as antitrust counsel. Barclays has been lead financial advisor to Schibsted, Arctic Securities has been advisor to the Schibsted Board of Directors and the company, and Cleary Gottlieb Steen & Hamilton and Wiersholm have been legal advisors. Financing is provided by Citigroup, Barclays and DNB.
Goldman Sachs and LionTree were financial advisors to eBay. Wachtell, Lipton, Rosen & Katz provided corporate legal counsel, and Quinn Emanuel Urquhart & Sullivan provided antitrust counsel.
Adevinta will hold a conference call to present the transaction on 21 July at 09:30 CEST. The webcast will be available on www.adevinta.com/ir and on this link:
https://hosting.3sens.com/Adevinta/20200720-34E8454F/en/startup.php. Participants are invited to ask questions using these dial-in details:
Norway: +47 2350 0296
UK: +44 (0)330 336 9411
USA: +1 323 794 2094
Confirmation code: 520 7163
A recording of the presentation will be available on our website shortly after the live webcast has ended.
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