Rakuten buys San Francisco-based Ebates for US $1 bn, in Japan’s largest e-commerce deal
What: Rakuten has agreed to buy U.S. rebates website Ebates.com in Japan's largest e-commerce deal for US $1 billion in cash.
Why it matters: This is the latest in a series of acquisitions to expand its business overseas.Rakuten will hold 100% of Ebates outstanding voting stock.
At a Board of Directors meeting, Japanese e-commerce firm Rakuten has resolved to acquire rebate website operator Ebates.com for US $1 billion in cash in what it is Japan's largest e-commerce deal, according to a company press release, to keep on expanding its business overseas.
Rakuten will hold 100% of Ebates outstanding voting stock. The acquisition of the remaining ownership by the other existing shareholders including employees of Ebates is planned simultaneously. CEO Hiroshi Mikitani has led Rakuten on a buying spree to reduce the firm's reliance on the domestic market.
CEO Hiroshi Mikitani has led Rakuten on a buying spree to reduce the firm's reliance on the domestic market
The firm started expanding businesses in e-Commerce after acquiring LinkShare in 2005. Other major acquisitions include messaging application Viber for US $900 million and Canadian e-book reader Kobo for US $315 million. Now, It is a natural fit for the Company to acquire a key player like Ebates, in order to develop a unique e-Commerce platform, by integrating its’ existing business assets and technologies with Ebates.
Ebates, founded in 1999, is a pioneer and major provider provider of the leading membership-based online cash-back site in the US and offers a platform that drives e-Commerce for retailers. With 2.5 million active members, The San Francisco company allows customers to earn cash back when shopping online at over 2,600 stores such as Amazon.com, Macy’s, Best Buy, Home Depot among others. In FY2013, Ebates generated US $2.2 billion of gross merchandise value (GMV), net revenue of US $167.4 million, and operating income of US $13.7 million.
Rakuten said it filed a shelf registration to issue up to 100 billion yen (US $940 million) in bonds, saying it would use the proceeds for operating cash, capital expenditures and others. The combination of the two companies will give birth to an attractive and innovative membership-based marketplace for consumers featuring a point program at the core.
“Through this acquisition, we aim to jump ahead with our global e-Commerce strategy and lead the global e-Commerce industry,” said Mikitani.