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A Catalyst for the Evolution of a Brand

Empowering eBay Enterprise’s strategic transformation

Over the past decade, and even in just a few years, technology continues to set the pace for our lives, with a big part of that acceleration centered on how we consume goods and services. Whether buying a cup of coffee or depositing a check, with each passing day it seems that – no matter where we are or what we’re doing – the world of ecommerce is at the center of ours.

Self-described as “the place the world goes to shop, sell and give,” eBay, Inc., has been at the heart of all things ecommerce for 20 years. In 2014, eBay operated through three divisions: marketplaces (eBay web marketplaces), payments (PayPal), and eBay Enterprise, which was, then, an end-to-end ecommerce partner for large retailers and brands. Going deeper, eBay Enterprise comprised three further divisions: Magento, eBay Marketing Solutions, Enterprise Services and Operations. At the time, eBay management recognized that a renewed and sharpened strategic focus was necessary to foster innovative growth for the future.

In September of 2014, eBay announced plans to separate PayPal into an independent company. Ten months later in July 2015, eBay completed the tax-free spin-off of PayPal to shareholders – enabling each company the opportunity to focus on individual growth strategies to thrive in their respective markets. Meanwhile, at the start of 2015, eBay also announced plans to evaluate strategic alternatives for its eBay Enterprise division. The subsequent sale of eBay Enterprise, to a consortium of buyers led by Permira Funds, was announced on July 16, 2015 – just days before the eBay/PayPal split was final.

Next Level: Strategies

As Permira’s buy-side advisor, the Raymond James Technology & Services Investment Banking team comprehensively evaluated the potential value and broad spectrum of strategic options for the multiple divisions within eBay Enterprise. This included evaluating Magento, the leading open-source ecommerce platform, and each business line within Marketing Solutions. Then, as a trusted partner and sell-side advisor through multiple strategic events, Raymond James demonstrated its unique ability to successfully navigate an expansive range of complex issues while successfully executing a series of transformational transactions.

In order to succeed, this private equity carve-out overcame numerous challenges including a truncated timeline, complicated operating structures, and a multitude of highly involved parties from across the globe. On November 2, 2015, after five months of fast-paced teamwork, several complex transactions closed simultaneously as eBay divested its eBay Enterprise division in a transaction valued at $925 million.

Leveraging the full capabilities of the firm, the Raymond James team worked hand-in-hand with their client to unlock value by carefully orchestrating this intensive transformational effort that ultimately included eight carve-out transactions, two acquisitions and two major rebranding campaigns.

The rebranding campaigns of two former eBay Enterprise business units solidified Magento as the leading open-source ecommerce platform and Pepperjam as the leader in online performance marketing. Today, Magento and Pepperjam are once again independent, accelerating, and poised for a new trajectory.

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