Following months of an investor-led strategic review, eBay announced Monday that it has sold its ticket subsidiary StubHub to Swiss ticket resale marketplace viagogo for $4.05 billion. The deal is a decent win for eBay considering that StubHub's growth has been essentially flat. StubHub had an annual revenue run rate of about $1.2 billion based on eBay's Q3.
eBay bought StubHub for $310 million in 2007.
Interestingly, StubHub's soon-to-be parent company viagogo is led by StubHub's cofounder Eric Baker. He left the company before it was sold to eBay, but said in today's press release that it has long been his wish to unite the two companies.
"I am so proud of how StubHub has grown over the years and excited about the possibilities for our shared future," Baker said. "Buyers will have a wider choice of tickets, and sellers will have a wider network of buyers. Bringing these two companies together creates a win-win for fans -- more choice and better pricing."
Once combined, StubHub and viagogo will have a global reach of more than 70 countries, along with access to a wider selection of inventory, the companies noted.
In March eBay faced investor-led pressure to restructure and sell some of its businesses. In response, the company's board approved a strategic review of eBay's assets, including StubHub and eBay Classifieds Group. At that point eBay began working with prominent shareholders Elliott Management and Starboard Value as it reviewed strategic options. eBay previously added two independent directors to its board as part of the review agreement with activist investors.
The investor talks harken to eBay's tumultuous split from its former payments subsidiary PayPal. eBay announced plans to spin off PayPal into a separate publicly traded company in late 2014 following months of speculation -- much of which came as a result of some very public criticism from shareholder and prominent financier Carl Icahn.
eBay expects the StubHub deal to close by the end of the first quarter of 2020, subject to regulatory approval and customary closing conditions.