Online auctioneer eBay is acquiring startup ticker reseller StubHub for $285 million plus the $25 million cash on StubHub's books ($310m total), in an effort to boost sagging growth as its core business matures. Privately-owned StubHub, based in San Francisco and founded seven years ago, had revenue last year of about $100 million and EBITDA earnings of approximately $10 million, so the buyout values the company at more than 30x cash flow. eBay has competed against StubHub in the lucrative ticket reselling business; IAC/Interactive's TicketMaster unit is another big player in the field. StubHub is the largest tickets-only online reseller, making a market in concert, sports and other events; ComScore reports 2.1 million unique visitors to StubHub last month.
• Sources: eBay press release, TechCrunch, WSJ, Reuters
• Related commentary: eBay Scalps StubHub (Om Malik), eBay's Q4 Listings Well Below Estimates - Jaffray, Internet Sector In '07: Continental Europe Will Be Key, Can eBay Stay Ahead?
• Potentially impacted stocks and ETFs: eBay (EBAY) Competitors: IAC/Interactive (IACI) Conference call transcripts: eBay Q3 2006
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