eBay has confirmed that it will acquire secondary ticket retailer StubHub for approximately $310 million, inclusive of the company's net cash as of the closing. The final amount will be determined at closing based on a formula and be payable in cash.
eBay's plans to acquire StubHub was earlier reported by CNBC's Darren Rovell.
eBay said that StubHub's acquisition will enable it to expand its presence and offering in the online tickets segment, while allowing StubHub to continue to scale its business with the e-commerce expertise and resources of eBay.
The acquisition is subject to regulatory approval and approval of StubHub's stockholders and should close in the first quarter of 2007.
StubHub was founded in 2000. StubHub is a reseller of tickets to major sporting and entertainment events. It collects a 15% commission from the ticket seller and a 10% commission from the buyer.
That's yielded about $100 million in net revenue from about $450 million in tickets sold in 2006.
With the StubHub acquisition, eBay will be entering an extremely volatile market. Some major sports teams have restricted resales of tickets on sites like Stubhub, in part because they have their own secondary ticket deals.
StubHub and eBay first talked in 2002, according to a Rovell's source. The price, according to the source, was then just a mere 20 million. Stubhub with a growth rate of 3000% from 2002 to 2005 was ranked the eighth fastest growing company in America by Inc magazine.