eBay is selling ticket resale marketplace StubHub to Viagogo for $4.05 billion in cash, according to a press release issued by the California company Monday morning. The sale is expected to close by the first quarter of 2020, assuming it clears regulatory hurdles and other closing conditions.
Eric Baker, Viagogo’s founder and CEO, also co-founded StubHub while in graduate school. “It has long been my wish to unite the two companies,” says Baker, who sold his stake in the company prior to eBay’s purchase of the marketplace for $310 million in 2007. “I am so proud of how StubHub has grown over the years and excited about the possibilities for our shared future. Buyers will have a wider choice of tickets, and sellers will have a wider network of buyers. Bringing these two companies together creates a win-win for fans – more choice and better pricing.”
The transaction will close nearly a year of speculation regarding the future of the largest ticket resale marketplace in the United States. Activist investors began pushing for eBay to spin off StubHub and other divisions in order to focus on its core marketplace business in January. eBay stock (NASDAQ: EBAY) jumped by close to 5% in pre-session trading Monday with the news, which was first reported by the Wall Street Journal.
“We believe this transaction is a great outcome and maximizes long-term value for eBay shareholders,” said Scott Schenkel, interim chief executive officer of eBay Inc. “Over the past several months, eBay’s leadership team and Board of Directors have been engaged in a thorough review of our current strategies and portfolio, and we concluded that this was the best path forward for both eBay and StubHub. We firmly believe in the StubHub business and we are excited about its future growth potential with viagogo as its owner.”
While it comes as no surprise that StubHub has been sold, Viagogo had not been mentioned as one of the likely suitors for the business in previous reporting. Originally, the interested parties were reported as Vivid Seats, LLC as well as Silver Lake Partners and KKR & Co. The price tag was also higher than expected, with speculation ranging as high as $3 billion – far less than the reported actual purchase price.
“Bringing StubHub and viagogo together will allow us to drive further expansion and innovation, and create a more competitive offering for live event fans globally,” said Sukhinder Singh Cassidy, president of StubHub. “This provides a great opportunity to expand our business, pursue new partnerships and execute our strategy. We expect a seamless transition for all our employees, partners and customers, and we are excited for what the future holds.”