eBay to sell enterprise unit for about $900 million
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ebay-189065_640E-commerce company eBay Inc is closing in on a deal to sell its Enterprise unit to consortium led by London-based private equity firm Permira for more than $900 million, according to reports from Wall Street Journal late Wednesday.

The deal is expected to be announced as soon as July 16, when eBay is scheduled to release second-quarter financial results, the Journal reported. The e- commerce company also hopes to complete the spinoff of its PayPal payments unit on Friday.

Since January, eBay has been looking to sell the Enterprise unit, which helps online retail sites for companies such as IKEA. The unit also houses the Magento e-commerce platform, logistics services and even design services. The consortium, which also includes private-equity firm Sterling Partners, could end up around $925 million. However, eBay had spent around $2.4 billion to acquire the enterprise unit in 2011, when it was called GSI Commerce.

Even though eBay extended the deadline of June 30 to July 15 with hopes to secure a deal, there was no guarantee that an agreement would be reached, the Journal reported, citing its sources.

Earlier this month eBay had reportedly been in talks with another potential buyer, private-equity firm Thomas H. Lee Partners LP to sell the division for as much as $1 billion, according to reports.

Before eBay acquired GSI, it generated $1.36 billion sales in 2010 which then included retail sites Rue La La, Fanatics and ShopRunner. The three companies are now owned by another holding company known as Kynetic LLC. The eBay Enterprise unit recorded $288 million in revenue in the first quarter of this year. Last year, the Enterprise unit took in $1.24 billion in revenue, a 6 percent increase from the prior year, according to eBay’s financial statements.

As the spinoff of its PayPal payments division nears, eBay has been busy streamlining its business. It has lost out on customers and seen tardy growth in the previous few years with clients moving their online operations in-house. Last week, the division suffered a blow last week when Toys “R” Us Inc., one of its biggest customers announced it would take its U.S. business in-house by mid next year.

Last month, the ecommerce company sold back to Craigslist Inc. a 28.4 percent stake it held since 2004 in San Francisco-based classified-ad site for an undisclosed amount, while also settling other litigation. Beginning this year, eBay announced about 2,400 job cuts in the first quarter, representing roughly 7 percent of its workforce.

Author
Christy Gren is an Industry Specialist Reporter at Industry Leaders Magazine; she enjoys writing about Unicorns, Silicon Valley, Startups, and Business leaders and innovators. Her articles provide an insight about the Power Players in the field of Technology, Auto, Manufacturing, and F&B. Follow Christy Gren on Twitter, Facebook & Google.

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