eBay Inc. (NASDAQ: EBAY) today announced it completed its previously announced acquisition of Braintree, the innovative global payment platform powering the next generation of leading online and mobile-first startups. In accordance with the terms of the acquisition agreement announced September 26, 2013, eBay acquired Braintree for total consideration of approximately $800 million in cash.
Braintree will now operate as a separate service within PayPal under the leadership of Braintree CEO Bill Ready, who will report to PayPal President David Marcus and has joined PayPal’s executive staff.
Braintree has become the payment platform of choice for next-generation innovators like Airbnb, OpenTable, HotelTonight and Uber, transforming consumer experiences through mobile devices. PayPal plans to integrate with Braintree only in ways that will benefit customers and support Braintree’s growth.
Venmo, Braintree’s mobile application that gives people an easy way to pay each other using their mobile devices and leveraging social networks, is part of the acquisition and will remain a separate app.
PayPal and Braintree are now focused on transforming the mobile payments space together. By combining efforts, we believe Braintree will accelerate PayPal’s strong presence in mobile payments, while PayPal will propel Braintree forward at a faster pace with its resources and global scale.
eBay anticipates the acquisition will have an immaterial impact to PayPal’s 2013 net total payment volume. eBay expects that definitional differences between PayPal’s net total payment volume and Braintree’s projected $12 billion payment volume for 2013, approximately one-third of which is expected to be driven by mobile payments, will lead to a significant portion of Braintree’s payment volume not being additive to PayPal’s net total payment volume and treated instead like PayPal’s payment gateway business, with only the revenue being recorded.
The take rate associated with Braintree’s payment volume varies significantly based on business mix. eBay expects the acquisition to be immaterial to its 2013 revenue guidance which it announced October 16, 2013, and due to timing to have an immaterial impact to its 2013 non-GAAP EPS guidance and a negative impact of $0.01 – $0.03 to its 2013 GAAP EPS guidance.