EBay bought DBA (and a ton of other classifieds businesses around the world) in 2008 to form eBay Classifieds Group. But classifieds were never really core to eBay’s ecommerce ambitions: Classifieds delivered revenue of just $248 million in the first quarter of 2020, or just over 10% of the company’s total.
A meaner, leaner eBay
Adevinta reportedly beat out private equity firm Blackstone and Prosus, part of South African media company Naspers, in the auction of eBay’s classifieds group, which includes Gumtree, Australia’s Autotrader and Motors.co.uk.
As part of the transaction, eBay will receive $2.5 billion in cash and 540 million Adevinta shares, or about 44% of the global online classifieds specialist. That will give eBay continued exposure to the classified ads business, while generating cash.
“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,” eBay CEO Jamie Iannone, who replaced David Wenig in April, said in a statement on Tuesday.
Adevinta, which began trading on the Oslo Stock Exchange last year, saw its shares rise 32% on Tuesday on news of the deal. It was spun off by Schibsted, a Nordic digital media and e-commerce company which began publishing newspapers in the 19th century.
Adevinta’s revenue fell 16% in the second quarter, compared to the same period last year, due to the impact of the coronavirus pandemic.