eBay Inc. announced that it has agreed to acquire Braintree, a global payment platform powering the next generation of leading online and mobile-first startups, for total consideration of approximately $800 million in cash.
“Braintree is a perfect fit with PayPal,” said eBay Inc. President and CEO John Donahoe. “Bill Ready and his team add complementary talent and technology that we believe will help accelerate PayPal’s global leadership in mobile payments. Together, we expect that PayPal and Braintree also will accelerate our leadership in supporting developers who are creating innovative solutions for next generation commerce startups.”
Braintree’s payment platform powers next generation innovators such as Airbnb, OpenTable, TaskRabbit and Uber, which are creating compelling new consumer experiences and disrupting legacy business models. Once the acquisition is completed, Braintree will continue to operate as a separate service within PayPal under the continued leadership of Braintree CEO Bill Ready, who will report to PayPal President David Marcus. Braintree’s management team and employees are expected to stay in place.
“PayPal was built on helping entrepreneurs grow great businesses online. I’m thrilled to welcome the Braintree team,” said PayPal President David Marcus. “With this deal I believe that we will accelerate our capabilities for developers, entrepreneurs, merchants and companies that are building the future.”
Braintree CEO Bill Ready said: “The alignment with PayPal means Braintree can continue to push the boundaries of innovation while expanding into new markets with increased speed and confidence. Our current customers and developer community can expect the same level of support and partnership they’ve always enjoyed, coupled with more resources.”
Venmo, Braintree’s mobile application that gives people an easy way to pay each other using their mobile devices and leveraging social networks, is part of the acquisition and will help to contribute to PayPal’s mobile payments capabilities. PayPal already has a strong presence in mobile, projecting mobile payment volume of more than $20 billion this year.
The transaction is subject to customary closing conditions, including regulatory approvals, and is expected to close late in the fourth quarter of 2013. Assuming PayPal’s acquisition of Braintree closes in late 2013, eBay anticipates an immaterial impact to PayPal’s 2013 net total payment volume. eBay expects that definitional differences between
PayPal’s net total payment volume and Braintree’s projected $12 billion payment volume for 2013, approximately one-third of which is expected to be driven by mobile payments, will lead to a significant portion of Braintree’s payment volume not being additive to PayPal’s net total payment volume and treated instead like PayPal’s payment gateway business, with only the revenue being recorded. The take rate associated with Braintree’s payment volume varies significantly based on business mix. Assuming the acquisition closes in late 2013, eBay expects the deal to be immaterial to its 2013 revenue guidance which it announced July 17, 2013, and to have a negative impact of $0.01 to its 2013 non-GAAP EPS guidance and a negative impact of $0.01 – $0.03 to its 2013 GAAP EPS guidance.