The pending sale of the Ebay online classified business seeks to monetize an asset. EBAy will receive 540 million shares of Adevinta, presently valued at $20.50 per share. With 681 mmillion shares of Ebay outstanding, this represents approximately .79 shares of ADSB per Ebay share. There is also a $2.5 billion cash consideration.
I suspect that Adevinta will command a much higher valuation in this red-hot market when the business operations are combined. At the present market price, ADSB is worth roughly $16.25 to each shareholder of Ebay, were the company to decide on a pro-rata distribution.
Ebay, with an annual EBITDA margin approximating 33% (ex-Adevinta) is a steadily growing business in its own right.
Ebay may generate total EBITDA of as much as $4 billion for fiscal 2021. This prices the online marketplace at roughly 11.4X 2021 EBITDA. Deduct the value of Adevinta and the metric changes to roughly 8.8X the 2021 EBITDA. Ebay seems likely to continue steady repurchases of their share float using the high cash generating capabilities.
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