How much did Amazon pay for Zappos?
News has just broken that Amazon.com has purchased hot ecommerce up-and-comer Zappos for 10 million Amazon shares or $880 million. (The Amazon release said it was $807 million, but that was based on a trailing 45-day estimate of its share price. Closing price today bumps the deal up to $880 million.) Zappos employees also will get $40 million in cash and restricted stock. In other words the deal is more like $920 million all told. And Zappos management will remain in place. This is a great exit for Zappos’ investors, including Sequoia Capital and Venture Frogs, who put in about $60 million in seven rounds. This isn’t just one of those times when companies say the management will stay and the company will be run independently. People close to the company say Zappos has long struggled with its desire to build a company for the long term and pressures to deliver a return for investors. This deal appears to be the best of both worlds. The way
Amazon said Wednesday that it is acquiring Zappos in a deal worth $847 million. The CEOs of both companies portrayed the deal as an e-commerce learning adventure where both sides can learn from each other and leverage strengths. The combination is an interesting one. Zappos.com, which primarily peddles shoes, has a strong following among customers. The company had plans to expand into new markets, and at some point, would compete with Amazon in more categories. Amazon’s answer: just buy Zappos. Under the terms of the deal, Amazon will fork over 10 million shares for Zappos worth $807 million. Amazon will also toss in $40 million in cash and restricted stock units for Zappos employees. Zappos has revenue of about $1 billion per year. In a statement, Amazon chief Jeff Bezos said the companies “see great opportunities for both companies to learn from each other.” In a letter to employees, Zappos CEO Tony Hsieh said that Amazon reached out to
Amazon Buys Zappos for More Than $800 Million Amazon.com Inc., making the biggest acquisition in its 14-year history, said it would buy rival online footwear retailer Zappos.com Inc. for about $847 million in cash and stock. The Seattle e-commerce giant’s purchase reflects its most serious effort to tap into Internet sales of apparel, the largest online-shopping category and one in which Amazon has had limited success in the past. Although it is best known for sales of books, DVDs and electronics, Amazon has operated an apparel store on its Web site for years. Several years ago, it made an effort to compete directly against Zappos with a footwear Web site called Endless.com, though analysts said the site hasn’t taken off. Sources: http://online.wsj.com/article/SB1248
