eBay this morning announced it's selling its ticket marketplace StubHub to Swiss ticket reseller viagogo for a cash price of $4.05 billion. The deal will merge StubHub U.S.-based marketplace with viagogo, which serves a worldwide audience as a ticket marketplace for live, sport, music, and entertainment events for fans in Europe, Asia, Australia, and Latin America.
The combined entity will sell hundreds of thousands of tickets across over 70 countries, eBay says.
The plan to sell of StubHub was initially sparked by activist investors, Elliott Management Corp. and Starboard Value LP, who began to pressure eBay to exit businesses that weren't a part of its core marketplace, including StubHub's ticketing and eBay's classified ads businesses. StubHub, Elliot had said, could be worth between $3.5 billion and $4.5 billion -- and the deal announced today puts the price right in the middle of that range.
eBay has been challenged over the past few years as it has tried to move away from its roots of being an online auction marketplace, to instead battle with e-commerce giants like Amazon. But its stock price had risen just 18% following its 2015 split from PayPal, The Wall Street Journal reported in January.
Meanwhile, eBay has owned StubHub since buying the company in 2007 for $310 million, as a way to more directly invest in the secondary market for tickets, many of which were being resold on eBay itself. The company also in 2016 acquired Spain's Ticketbis with the goal of further expanding StubHub's footprint outside the U.S.
As of Q3, StubHub drove $306 million in revenue and gross merchandise volume of $1.2 billion. At the time of its earnings announcement, eBay said it anticipated an update on the StubHub business before the next quarterly earnings.
"We believe this transaction is a great outcome and maximizes long-term value for eBay shareholders," said Scott Schenkel, interim chief executive officer of eBay Inc., in a statement. "Over the past several months, eBay’s leadership team and Board of Directors have been engaged in a thorough review of our current strategies and portfolio, and we concluded that this was the best path forward for both eBay and StubHub. We firmly believe in the StubHub business and we are excited about its future growth potential with viagogo as its owner."
Eric Baker, viagogo's founder and CEO, had also co-founded StubHub while in business school but left ahead of its acquisition. The deal, then, makes for an interesting full circle with StubHub being returned to an original founder.
"It has long been my wish to unite the two companies. I am so proud of how StubHub has grown over the years and excited about the possibilities for our shared future," Baker said. "Buyers will have a wider choice of tickets, and sellers will have a wider network of buyers. Bringing these two companies together creates a win-win for fans - more choice and better pricing," he added.
The deal is expected to close in the first quarter of 2020, subject to regulatory approval and customary closing conditions.