eBay buys Chicago-based Braintree for $800 million
By BARBARA ORTUTAY AP Technology Writer September 26, 2013 9:54AM
Updated: September 26, 2013 11:06AM
NEW YORK — E-commerce giant eBay Inc. reached a deal to buy Chicago-based online and mobile payments technology provider Braintree for $800 million in cash.
The move comes as eBay’s PayPal unit works to evolve from its roots as an online payments provider, expanding its offline, mobile and online offerings to stores, restaurants and other business.
Braintree’s payments technology is used by popular startups such as vacation rentals site Airbnb, cab-hailing app Uber and restaurant reservations site OpenTable. The company charges businesses a fee of 2.9 percent plus 30 cents per each transaction, and expects to process about $12 billion in payments this year.
San Jose, Calif.-based eBay Inc. said Thursday that it will operate Braintree as a separate business. Bill Ready, the CEO of Braintree, will report to PayPal President David Marcus.
“Braintree will continue to do what it’s currently doing,” Marcus said, adding that PayPal will help the company to grow and to expand internationally. EBay said that Braintree’s mobile app, Venmo, will help add to PayPal’s mobile payments capabilities. The app lets people pay each other using their mobile devices, similar to a service PayPal offers.
Braintree’s roughly 200 employees are staying with the company.
EBay said it expects to close the deal before the end of the year. It doesn’t expect the acquisition to affect its 2013 revenue, but it will lower its adjusted earnings per share by 1 cent. In July, the company forecast adjusted earnings of $2.70 to $2.75 per share and revenue of $16 billion to $16.5 billion for the full year.
Shares of eBay rose 62 cents to $54.84 in premarket trading.