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Naver shopping for Poshmark for $17.90 per share is an interesting deal, that includes components of cross-border M&A, a sector on its again foot, and stock-market dynamics making some previously costly firms maybe cheaper to choose off than they might ever be once more.
TechCrunch+ requested yesterday why we weren’t seeing extra software program M&A in gentle of depressed expertise share costs and the mountain of money sitting on the sidelines immediately, on the lookout for a deal. What we’d have harassed barely extra was the potential of company M&A over non-public fairness acquisitions.
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At the moment, let’s chat by means of the Naver-Poshmark deal’s numbers and ask what we will glean from the transaction. In any case, we’re seeing a public firm snatched from independence, which implies we now have a wealthy dataset to parse. And due to information from different transactions in the identical area, comparative information paints a considerably brutal image of the brand new valuation local weather.
Naver, a South Korean web firm, will purchase all Poshmark inventory for $17.90 per share in money. The deal values the smaller firm at an enterprise worth of round $1.2 billion.
In fairness phrases, how TechCrunch tends to contemplate company value, that worth is round $1.6 billion, given what the 2 entities described in a press launch as the idea of “$436 million of unrestricted money on stability sheet as of June 30, 2022,” at Poshmark.
I don’t bore you with valuation nuance merely to remind you that it’s necessary to grok the distinction between enterprise and fairness pricing. As a substitute, it’s necessary to grasp that the hole is so giant as a result of Poshmark had a lot unrestricted money relative to its market cap. (Poshmark reported “money and money equivalents have been $581.2 million,” or “$7.41 in money per share,” on the finish of the second quarter.)
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