- Korea-based internet company, Naver Corp, has agreed to acquire Poshmark Inc POSH for $17.90 in cash, representing an enterprise value of approximately $1.2 billion.
- The value represents a premium of 15% to Poshmark's closing stock price as of October 3, 2022.
- Poshmark is a social e-commerce marketplace for new and secondhand styles.
- The companies expect the transaction to close by the first quarter of 2023.
- Wall Street Journal said Poshmark agreed to sell itself in a deal that values the company at less than half the price where it went public in early 2021.
- Poshmark priced its initial public offering at $42 a share in January 2021, and the shares more than doubled on their first day. The stock has slumped since and closed Monday at $15.57.
- While the COVID-19 pandemic boosted online shopping, Poshmark's losses have widened, and its revenue growth has slowed this year. After reaching $90.9 million in revenue in the March quarter, revenue declined to $89.1 million in the June quarter. Poshmark forecasts sales of $85-$87 million for the September quarter.
- The companies said the combination would help Poshmark expand into Korea and other parts of Asia. Poshmark currently offers its app to users in the U.S., Canada, Australia, and India. It would also give Naver a more significant foothold in the U.S. market.
- Naver expects the deal will enable savings totaling around $30 million for the two companies.
- Though this is Naver's largest M&A deal, Reuters reported that the market is skeptical about whether this is the best timing. Since COVID-19 became endemic, many platform companies have lost their shine. And the falling Korean won doesn't help, the report cited Sung Jong-hwa, eBest Investment & Securities analyst.
- Price Action: POSH shares are up 13.10% at $17.61 during the premarket session on the last check Tuesday.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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