Japanese e-commerce and Internet company Rakuten buys Ebates in a $1 billion all-cash deal. Rakuten says it will hold 100% of Ebates outstanding voting stock. Ebates is America’s leading membership-based online cash-back site.
The transaction will give the Tokyo-based company access to 2.5 million new loyal active customers.
Rakuten wants to move into other markets and depend less on Japan, where consumer demand has been weak for a long time.
Ebates has more than 2,600 enterprises across a broad range of retail formats and product genres within its network, including online travel agencies, retailers with considerable e-commerce operations, and other major e-commerce sites.
In FY 2013, Ebates generated:
- $2.2 billion GMV (gross merchandising value),
- $167.4 million in net revenue,
- operating income of $13.7 million.
Takeover a “natural fit”
Since acquiring LinkShare nine years ago, Rakuten says it has “successfully expanded businesses in e-Commerce, advertising and related areas through long-standing mutual respect with Ebates.”
Rakuten describes the Ebates acquisition as a “natural fit”. A move that will allow it to successfully develop a unique and innovative e-commerce platform, by integrating its current business assets and technology with those of Ebates.
In a statement today, Hiroshi Mikitani, Chairman and CEO of Rakuten, Inc., wrote:
“With the participation of Ebates, Rakuten Group amis to create the world’s largest product line-up, ranging from nich to luxury products, and to allow consumers to enjoy points rewards and cash-back purchase of products over various partner sites through Ebates.”
Rakuten’s growth through acquisitions
Rakuten acquired California-based online retailer Buy.com for $250 million, and changed its name to Rakuten.com. In the same year it bought French online retailer Priceminister for €200 million.
It launched Rakuten Belania Online in Indonesia, and also bought Ikeda, the Brazilian e-commerce business, whose name it changed to Rakuten Brazil.
There were several other acquisitions that year, including Germany’s Tradoria (rebranded as Rakuten Deutschland), UK’s Play.com, and it purchased a minority stake in Russian Ozon.ru (Ruzzia’s Amazon).
Rakuten bought Canadian e-book reader firm Kobo. It led a group of partners who invested $100 million in the Pinterest photo-sharing social network. It bought Spanish video-on-demand business Wuaki.tv and French online retail delivery firm Alpha Direct Services.
By the end of 2012, Rakuten had entered the online retail markets of Thailand, Taiwan, Spain, Canada and Austria, as well as the online travel markets of France, Taiwan, Hong Kong, South Korea and China.
It purchased a majority stake in “citizen commerce” website, Daily Grommet, today known as The Grommet. It acquired American-based logistics and services firm Webgistix, as well as Singapore-based Viki.
So far this year it has acquired smartphone software-maker Viber for $900 millon, UK-based technology company DC Storm, and now Ebates for $1 billion.