South Korea’s Naver Acquires US E-Commerce Platform Poshmark for $1.2 Billion

South Korea’s Naver Acquires US E-Commerce Platform Poshmark for $1.2 Billion
South Korean businessman and founder of the Korean internet group Naver-Korelya Hae-Jin Lee, poses for a photo session, in Paris, France, on Oct.19, 2017. (Alain Jocard/AFP via Getty Images)

South Korea’s internet giant Naver said Monday that it will acquire Poshmark, a U.S.-based social commerce platform, for $1.2 billion, including all of its issued and outstanding shares.

Naver said that it would acquire each share of Poshmark for $17.90 in cash, a 15 percent premium over Poshmark’s Monday closing price. The enterprise value for Poshmark is $1.2 billion.

The company aims to capitalize on the $80 billion U.S. e-commerce market, which it estimates will grow by 20 percent annually to $130 billion by 2025, through its acquisition of Poshmark.

“This transaction provides Naver with an enhanced foothold in the U.S., expanding its international profile, which it has steadily increased both organically and through investments over the past 20 years,” it stated.

Naver’s stock fell 7.5 percent on Tuesday after it announced the deal. Investors were skeptical of the acquisition’s timing amid the slow economy and the decline of South Korea’s currency, which fell 17 percent against the U.S. dollar this year.

Manish Chandra, Poshmark founder and CEO, said that his company will benefit from Naver’s financial resources, technology capabilities, and leading presence across Asia in the long run.

Poshmark has over 80 million users in the United States, primarily millennials or generation Z, and generated approximately $2 billion in gross merchandise value last year with a take rate of 20 percent.

The company reported a wider-than-expected quarterly loss in August, exacerbated by slower e-commerce growth, but efficient marketing spend and advertisement revenue could help profitability, Naver said.

“The online market changes so quickly, not doing anything can mean losing long-term value,” Naver CEO Choi Soo-Yeon said.

Naver is the largest portal site in South Korea and has more than 36 million monthly users. The company also acquired North American online literature platform Wattpad for $600 million last year.

Reuters contributed to this report.

From The Epoch Times