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Etsy strums a deal for vintage musical instruments marketplace Reverb
Posted on Tuesday, 23 July 2019 13:42
Etsy has agreed to acquire new, used and vintage music gear online retailer Reverb for USD 275.00 million, bringing together two leading ecommerce platforms.
The consideration is expected to be paid in cash, subject to certain adjustments, such as debt, working capital, transaction expenses and the value of equity awards granted in connection to the deal.
Reverb will operate as a standalone business following closing, which is expected in the late third quarter or early fourth quarter of 2019 and is subject to Hart-Scott-Rodino review, among other conditions.
Founded in 2013, the target is focused on supplying musical instruments that are easy and affordable, with sellers ranging from brick and mortar retailers, individuals and high-profile artists.
Etsy operates one of the world’s largest marketplaces for unique and creative goods such as arts, crafts and jewellery and through the purchase of Reverb, is moving into the music sector.
Both companies have operations in the US, Canada, the UK, France, Germany and Australia.
Josh Silverman, chief executive of the buyer, said: “This transaction is a great strategic fit that firmly aligns with our mission of keeping commerce human. Reverb is the 'Etsy' of musical instruments, with significant competitive advantages, and we see tremendous value and untapped potential in the business.”
Finance chief Rachel Glaser added: “As we have said, our M&A [mergers and acquisitions] strategy looks to put our capital to work in an opportunistic way - finding great businesses at the right value - and we believe Reverb is just that.”
In the three months ended 31st March 2019, Etsy generated revenue USD 169.34 million increased 40.1 per cent to USD 120.91 million in the corresponding period of 2018.
Adjusted earnings before interest, taxes, depreciation and amortisation rose 88.7 per cent to USD 49.87 million in Q1 2019 (Q1 2018: USD 26.42 million).
Shares in Etsy closed up 2.7 per cent to USD 68.53 yesterday, giving the company a market capitalisation of USD 8.24 billion.
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