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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.
If you’re a Poshmark fan, immediately won’t be an extremely enjoyable day. However the deal goes by means of and we need to know why— and what it’d imply for others. To work!
The deal, briefly
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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