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eBay Will Sell Enterprise Unit for $925 Million as PayPal Spinoff Nears

The company found a resolution for Enterprise before its separation from PayPal, but the deal isn't exactly a win.

eBay

On the eve of its separation with PayPal, eBay has agreed to sell off its eBay Enterprise unit for $925 million, the company announced this morning. The division, which helps power the online stores for retailers and brands, will be acquired by a group of investment entities including the private equity firms Sterling Partners and Permira.

The move comes as eBay finalizes its spinoff of PayPal tomorrow, and the two companies will prepare to open up for regular trading on Nasdaq as two separate companies on Monday. EBay announced in the fall that it would separate its marketplace shopping business and PayPal business after initially pushing back on such an idea when investor Carl Icahn called for it early in 2014.

EBay has succeeded in finding a resolution for Enterprise before the spinoff, something it has talked about since January, but the deal isn’t exactly a win. EBay acquired Enterprise, formerly known as GSI Commerce, for $2.4 billion — or almost three times the current sale price — in 2011. At the time, eBay spun off the majority or entire stakes of parts of GSI, including flash sale site Rue La La and the online sports retailer Fanatics. What it was left with was a business that sells e-commerce and logistics services to midsize and large retailers. While parts of the business like the Magento software platform still hold promise, the business also faces challenges as some big long-term clients such as Toys “R” Us decide to leave the GSI platform.

Separately, the combined entity of eBay, eBay Enterprise and PayPal reported second-quarter financial results for the final time today. If you include Enterprise numbers — which eBay reported under discontinued operations but which analysts were including in estimates — revenue totaled more than $4.6 billion, beating analyst estimates of just under $4.5 billion. Earnings per share for the combined entities, excluding some items, was 76 cents, beating estimates of 72 cents. The stock was up more than 3 percent in pre-market trading.

This article originally appeared on Recode.net.

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