Fusion Corporate Partners

eBay is acquiring GSI Commerce, a provider of ecommerce and interactive marketing services, for $29.25 a share, or total consideration of approximately $2.4 billion. The acquisition, which will be financed with cash and debt, is expected to close in the third quarter of 2011.

The merger consideration represents a 51 percent premium over GSI’s March 25, 2011, closing price and a 47 percent premium over the average closing price of GSI Commerce common stock over the 30 trading days prior to March 28, 2011.

“We intend to lead the next generation of commerce innovation. The acquisition of GSI, which offers the most comprehensive integrated suite of online commerce and interactive marketing services available, will significantly strengthen our ability to connect buyers and sellers worldwide,” said John Donahoe, eBay Inc. President and CEO. “Combined with eBay Marketplaces and PayPal, we believe GSI will enhance our position as the leading strategic global commerce partner of choice for retailers and brands of all sizes. With more than 180 customers across 14 merchandise categories, GSI has long-term commerce services relationships with leading retailers and brands. We expect that GSI will benefit from eBay’s global platform and technology capabilities, and its clients will be able to leverage eBay Marketplaces and PayPal services.”

As part of the transaction, eBay will divest 100 percent of GSI’s licensed sports merchandise business and 70 percent of ShopRunner and Rue La La. eBay believes these businesses are not core to its long-term growth strategy. These assets will be sold to a newly formed holding company, which will be led by GSI founder and CEO Michael Rubin.

eBay expects the transaction to result in synergies of approximately $60 million by 2013; the company expects the transaction to be EPS neutral in 2011 and accretive in 2012. As part of the divestiture, eBay will loan the holding company $467 million and retain a 30 percent stake in Rue La La and ShopRunner. In addition, Michael Rubin will invest additional cash of $31 million in the holding company.

Under the terms of the merger agreement, GSI Commerce may solicit acquisition proposals from third parties for a 40-day “go-shop” period continuing through May 6, 2011. It is not anticipated that any developments will be disclosed with regard to this process unless GSI Commerce’s Board of Directors makes a decision with respect to a potential superior proposal. The merger agreement provides eBay with a customary right to match a superior proposal. There is no guarantee that this process will result in a superior proposal.

Goldman, Sachs & Co. and Peter J. Solomon Company are acting as financial advisers to eBay, while Dewey & LeBoeuf LLP is acting as its legal adviser with regard to the transaction. Morgan Stanley & Co. Incorporated is acting as financial adviser to GSI Commerce and Davis Polk & Wardwell LLP is acting as legal adviser to the special committee of the GSI Commerce Board of Directors. Morgan, Lewis & Bockius LLP is acting as legal adviser to GSI Commerce.

Assuming its acquisition of GSI closes mid-third quarter, eBay said it expects the deal to be immaterial to its 2011 non-GAAP EPS guidance which it announced January 19, and have a negative impact of $0.30 – $0.34 to its 2011 GAAP EPS guidance, including a GAAP charge primarily related to the divested GSI businesses.

For more information on the transaction, including background information and factsheets, visit http://changingshopping.ebayinc.com.

USA, San Jose, CA & King of Prussia, PA

Related articles:

• eBay to acquire brands4friends for $200 million Posted on December 20, 201o
• eBay Acquires RedLaser (barcode-scanning application for iPhone) Posted on June 30, 2010
• eBay Inc. Completes Sale of Skype to investor group led by Silver Lake Posted on November 19, 2009

Gilt Groupe, an innovative online shopping destination, has acquired home decor site Decorati.  Terms of the deal were not disclosed.

Decorati is a destination site for upscale interior design products and services as well as a community for the display of designer portfolios.  Decorati is a resource that enables interior design professionals to efficiently manage their projects and promote their businesses.  For consumers, Decorati offers a vast inspirational library of product images, along with the ability to connect with design professionals and research products from over 650 trade-only manufacturers.

“My vision for Decorati has always been to create a website to connect consumers with designers and provide broader access to the best interior design products and inspiration,” said Shane Reilly, Founder & CEO, Decorati.  “Marrying Decorati with Gilt’s shopping platform and vision for an expanded Home business will allow for an even stronger offering for our members.”

The Decorati acquisition will pave the way for Gilt to launch a broader Home business. Gilt plans to unveil its new Home offering later this year, which will be a mixture of full-price merchandise, one-of-a-kind items and antiques, daily flash sales, community and social tools, and will include a channel specifically for the designer.

Gilt Home currently offers 30 sales per week from over 400 brands including Baker, Kravet, Jonathan Adler, Stark, Lignet Roset, Mitchell Gold + Bob Williams, Frette, and Soicher Marin. By incorporating a selection of products from additional trade-only brands, Gilt will create an assortment of home décor products shoppable online.

“The design community will be a key component of our expanded Home business,” said Kevin Ryan, Founder and CEO, Gilt Groupe.  “Decorati has done a fantastic job establishing a venue for high-end designers, knowledgeable consumers, and trade-only brands.  We are excited to combine those assets as we expand Gilt’s Home business.

USA, New York, NY

Gilt Groupe, an innovative online shopping destination, has acquired home decor site Decorati.  Terms of the deal were not disclosed.

Decorati is a destination site for upscale interior design products and services as well as a community for the display of designer portfolios.  Decorati is a resource that enables interior design professionals to efficiently manage their projects and promote their businesses.  For consumers, Decorati offers a vast inspirational library of product images, along with the ability to connect with design professionals and research products from over 650 trade-only manufacturers.

“My vision for Decorati has always been to create a website to connect consumers with designers and provide broader access to the best interior design products and inspiration,” said Shane Reilly, Founder & CEO, Decorati.  “Marrying Decorati with Gilt’s shopping platform and vision for an expanded Home business will allow for an even stronger offering for our members.”

The Decorati acquisition will pave the way for Gilt to launch a broader Home business. Gilt plans to unveil its new Home offering later this year, which will be a mixture of full-price merchandise, one-of-a-kind items and antiques, daily flash sales, community and social tools, and will include a channel specifically for the designer.

Gilt Home currently offers 30 sales per week from over 400 brands including Baker, Kravet, Jonathan Adler, Stark, Lignet Roset, Mitchell Gold + Bob Williams, Frette, and Soicher Marin. By incorporating a selection of products from additional trade-only brands, Gilt will create an assortment of home décor products shoppable online.

“The design community will be a key component of our expanded Home business,” said Kevin Ryan, Founder and CEO, Gilt Groupe.  “Decorati has done a fantastic job establishing a venue for high-end designers, knowledgeable consumers, and trade-only brands.  We are excited to combine those assets as we expand Gilt’s Home business.

USA, New York, NY

Shutterfly, an Internet-based social expression and personal publishing service, announced today that it has entered into an agreement to acquire Tiny Prints, a privately-held company based in Sunnyvale, CA. Tiny Prints operates tinyprints.com and weddingpaperdivas.com, two fast growing ecommerce brands offering stylish cards, invitations, personalized stationery and photo books. Upon the closing of this transaction, the three co-founders, together with the entire Tiny Prints team will join Shutterfly.

Shutterfly will acquire all of the outstanding stock of Tiny Prints in exchange for approximately $141 million in cash and approximately 3.9 million shares of Shutterfly common stock. In addition, Shutterfly will reserve approximately 1.4 million shares of common stock as consideration for the vested and unvested Tiny Prints employee equity awards assumed by Shutterfly. The structure of the transaction includes a fixed exchange ratio for the equity component of the consideration and provides for certain adjustments, including for working capital and net cash and debt balances at closing.

The deal is expected to close in approximately 30 to 60 days. Tiny Prints stockholders will own approximately 12% of the pro forma combined company. Tiny Prints outside investors will be subject to a six-month lock-up on the sale of Shutterfly shares received in the transaction and the Tiny Prints founders will be subject to a staggered 18-month lock-up. In addition, approximately 9% of the acquisition consideration will be held in escrow for 12 months.

“Shutterfly and Tiny Prints share a common passion: providing customers with innovative, high quality premium products, stylish designs and exceptional customer service,” said Jeffrey Housenbold, President and CEO of Shutterfly. “Together, we will build on our portfolio of iconic brands and combine our passionate, entrepreneurial employees to truly transform the cards and stationery market. We believe the integration of our businesses will create near-term and long-term opportunities for enhanced merchandising, accelerated product innovation and significant scale efficiencies in manufacturing, customer service and marketing. We are excited to welcome the entire Tiny Prints team to Shutterfly.”

“Like Shutterfly, Tiny Prints has experienced rapid growth in recent years,” said Ed Han, Tiny Prints co-founder and CEO. “By merging with Shutterfly, we will benefit from the many synergies and efficiencies between our organizations, enabling Tiny Prints to continue delighting our customers with a broader array of stylish and innovative products and services while growing our brands and maintaining our talented team.”

Evercore Partners served as Shutterfly’s exclusive financial advisor on the transaction and Morrison & Foerster LLP served as its legal counsel. Fenwick & West LLP served as Tiny Prints legal counsel.

USA, Redwood City, CA & Sunnyvale, CA