Tags : ebay, Skype
eBay Plans Skype IPO By 2010
San Jose, CA (AHN) – eBay, which entered Tuesday into a definitive agreement with four investors to sell 65 percent of its stake in Skype Technologies for $1.9 billion, plans to offer shares of Skype through an initial public offering next year.
In a filing with the Securities and Exchange Commission, eBay said it plans to offer 57.3 million shares of common stocks which has an aggregate value as of Aug. 5, 2009 of $171 million. eBay had planned the Skype IPO as early as April this year.
Skype is the maker and developer of the Voice over Internet Protocol, which is used by millions of people and companies around the world to make free video and voice calls, send instant messages and share files.
The investor group, made up of the Canadian Pension Plan Investment Board, technology firm Silver Lake, global venture capital company Index Ventures and newly launched venture capital firm Andreessen Horowitz, will buy the 65 percent share from eBay, which will keep the remaining 35 percent holding in Skype.
CPP Investment Board senior vice president Mark Wiseman said in a statement, “This acquisition represents an opportunity to acquire a leader in the rapidly growing Internet telecommunications market and one of the most strategically valuable Internet brands in the marketplace. We look forward to working with our partners to help grow Skype in this accelerating industry.”
The CPP Investment Board has lately been into an acquisition mode for telecom companies. In early 2009, it bought Macquarie Communications Infrastructure Group. Macquarie has a 48 percent hold in Arqiva – an infrastructure provider for television, radio and wireless communications in the U.K. – and owns 100 percent of Broadcast Australia.
Its investment in Skype is deemed a wise decision since Skype earned $551 million in 2008 and has 405 million users as of December 2008. The board has 17 million contributors and beneficiaries in Canada and has a $116.6 billion fund as of mid-2009.
eBay CEO John Donahoe said, “There is no doubt in my mind that the talented players that make up this investment group will enable strong growth of Skype in the years to come?. The management team at Skype is one of the most innovative in the industry, and their talent and innovation will be enhanced through this partnership. For eBay, this transaction allows us to unlock both immediate and long-term value while benefiting from talented partners to help Skype accelerate its growth momentum.”
eBay forecasts Skype’s income to go beyond $1 billion by 2011.
Donahoe added, “We’ve acted decisively on a deal that delivers a high valuation, gives us significant cash up-front and lets us retain a meaningful minority stake with talented partners. Skype is a strong standalone business, but it does not have synergies with our e-commerce and online payments businesses. As a separate company, we believe that Skype will have the focus required to compete effectively in online voice and video communications and accelerate its growth momentum.”
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