EBay to buy payments company Braintree for $800M (Update)

Sep 26, 2013 by Barbara Ortutay

E-commerce giant eBay Inc. reached a deal to buy 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, California-based eBay Inc. said Thursday that it will operate Braintree as a separate business. Bill Ready, the CEO of the Chicago-based company, 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.

"(The) addition of Braintree removes a growing competitor in the payment space while adding key talent and technology" to eBay, said Janney Capital Markets analyst Shawn Milne in a note to investors. Milne estimates Braintree's revenue to be around $100 million to $150 million a year.

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 $2.43, or 4.5 percent, to close at $56.64. The stock has traded in the 52-week range of $45.66 and $58.04.

Explore further: PayPal app adds more mobile wallet features

not rated yet
add to favorites email to friend print save as pdf

Related Stories

Facebook to test mobile payments service (Update)

Aug 15, 2013

Facebook plans to test a mobile payments service that lets users make purchases inside mobile applications using payment information they have added to their account on the social network.

Recommended for you

IBM posts lower 1Q earnings amid hardware slump

9 hours ago

IBM's first-quarter earnings fell and revenue came in below Wall Street's expectations amid an ongoing decline in its hardware business, one that was exasperated by weaker demand in China and emerging markets.

New US-Spanish firm says targets rich mobile ad market

16 hours ago

Spanish telecoms firm Telefonica and US investment giant Blackstone launched a mobile telephone advertising venture on Wednesday, challenging internet giants such as Google and Facebook in a multi-billion-dollar ...

Technip, Heerema win third giant Angolan oil contract

19 hours ago

The ultra-deep Angolan offshore oil project called Kaombo generated the third huge contract in three days on Wednesday when French group Total picked two firms to carry out underwater engineering worth $3.5 billion.

User comments : 0

More news stories

Simplicity is key to co-operative robots

A way of making hundreds—or even thousands—of tiny robots cluster to carry out tasks without using any memory or processing power has been developed by engineers at the University of Sheffield, UK.

Microsoft CEO is driving data-culture mindset

(Phys.org) —Microsoft's future strategy: is all about leveraging data, from different sources, coming together using one cohesive Microsoft architecture. Microsoft CEO Satya Nadella on Tuesday, both in ...

Floating nuclear plants could ride out tsunamis

When an earthquake and tsunami struck the Fukushima Daiichi nuclear plant complex in 2011, neither the quake nor the inundation caused the ensuing contamination. Rather, it was the aftereffects—specifically, ...

New clinical trial launched for advance lung cancer

Cancer Research UK is partnering with pharmaceutical companies AstraZeneca and Pfizer to create a pioneering clinical trial for patients with advanced lung cancer – marking a new era of research into personalised medicines ...

More vets turn to prosthetics to help legless pets

A 9-month-old boxer pup named Duncan barreled down a beach in Oregon, running full tilt on soft sand into YouTube history and showing more than 4 million viewers that he can revel in a good romp despite lacking ...