Companies Share Strategic Vision of Global Ecommerce Marketplace
– In a move signaling an acceleration of its global expansion plans, Japan’s leading internet company, Rakuten, announced today that it has reached a definitive agreement to acquire Buy.com, a leading U.S. retail marketplace. Combined, the two companies represent one of the world’s largest online retail marketplaces, offering consumers more than 60 million products from close to 35,000 merchants around the globe. The acquisition, valued at approximately $250 million (USD), will be carried out by Rakuten’s U.S. subsidiary, Rakuten USA.
Across Asia, Rakuten has established itself as an ecommerce powerhouse, empowering tens of
thousands of merchants to build personal relationships with their customers through its innovative
approach of combining shopping and entertainment – called Rakuten Ichiba. In 2005, Rakuten
established a presence in the U.S. through its acquisition of LinkShare, a leading performance marketing
company. In North America and much of Europe, Buy.com has recently surged as a major online
marketplace, having experienced profitable growth for the past three years. Among its own innovations,
Buy.com was the first online retailer to offer enhanced shopping features such as BuyTV, which enables
consumers to watch product video reviews and learn about products before purchase.
“As we evaluated how to accelerate our global expansion, it became clear that a partnership with
Buy.com made perfect sense,” said Hiroshi Mikitani, Founder, Chairman and CEO of Rakuten. “As a
company, Buy.com shares our vision for the future of ecommerce â€ as a platform to give consumers the
best value no matter their location, and to merge shopping with entertainment, and to help retailers
build deep and lasting consumer relationships.” Rakuten has recently begun to expand its eâ€commerce business globally. With its vision of borderless ecommerce, Rakuten seeks to enable consumers anywhere on the globe to buy products sold by merchants based in any country. Buy.com presents a unique opportunity to accelerate the notion of borderless ecommerce in both directions – from East to West, and West to East.
“At Buy.com we have made it our mission to develop a destination site that stands for the best of online
shopping – great deals, strong product insights and special features that make the online shopping
experience convenient and affordable,” said Neel Grover, CEO and President of Buy.com. “Given
Rakuten’s global success, their leadership and strengths will help take Buy.com to an entirely new level
of competition in online retailing.”
As the two companies merge, Rakuten expects to deploy product innovations across its global platform,
to empower retailers with unique crossâ€sale opportunities, and to introduce new sales and marketing
programs leveraging collaboration opportunities between its various operating groups.
With more than 14 million customers, Buy.com is a leading retail marketplace, focused on providing its
customers with a great shopping experience and a broad selection of retail goods at everyday low prices.
Buy.com offers millions of products in a range of categories, including consumer electronics, computer
hardware and software, cell phones, books, music, DVDs, games, toys, bags, fragrance, home and
outdoor, baby, jewelry, shoes, apparel and sporting goods. Founded in June 1997, Buy.com is
headquartered in Aliso Viejo, California. Buy.com® and The Internet Superstore™ are trademarks of
Buy.com was advised by Lazard, Catalina Securities and Dorsey & Whitney LLP.
In Japan, Rakuten has approximately 64 million registered members and sales in 2009 totaled US$3.2
billion. Its core business “Rakuten Ichiba” is Japan’s largest Internet shopping mall and offers more than 50 million products by over 33,000 merchants, some of whom have turnover of more than US$1 million per month. In addition to its Internet shopping mall, Rakuten, which has more than 6,000 employees, is engaged in other Internet businesses such as travel agency and financial services.
1ï¼ŽThe acquisition method
Rakuten will acquire Buy.com through the merger between Buy.com and Merger Sub which was founded
by Rakuten USA for the purpose of this acquisition according to the laws of the State of Delaware. The
shareholders of Buy.com will receive cash as consideration and Buy.com will become a wholly-owned
subsidiary of Rakuten USA.
2ï¼ŽOutline of Buy.com
ï¼ˆ1ï¼‰ C o r p o r a t e N a m e Buy.com Inc.
ï¼ˆ2ï¼‰ A d d r e s s 85 Enterprise, Suite 100 Aliso Viejo, California 92656
ï¼ˆ3ï¼‰ N a m e o f
R e p r e s e n t a t i v e CEO: Neel Grover
ï¼ˆ4ï¼‰ Business Description Operating e-commerce business
ï¼ˆ5ï¼‰ Capital Stockï¼ˆ *ï¼‰ USD 16,000ï¼ˆAs of Dec. 31 2009ï¼‰
ï¼ˆ6ï¼‰ Year of Incorporation Aug. 3, 1998
a n d O w n e r s h i p
Scott A. Blum Separate Property Trust UTD 86.9ï¼…
CCP A, L.P. 11.3%
C a p i t a l R e l a t i o n s h i p None
P e r s o n a l R e l a t i o n s h i p None
B u s i n e s s R e l a t i o n s h i p None
ï¼ˆï¼˜ï¼‰ Relationship between
Rakuten and Buy.com
Relationship with related parties None
ï¼ˆï¼™ï¼‰ Operating and Financial results for the last two years
ï¼ˆThousand USDï¼‰ Dec 2009
N e t A s s e t s 18,581 30,409 2,798
T o t a l A s s e t s 71,972 75,480 6,944
Book-Value Per Shareï¼ˆUSDï¼‰ 1.15 1.88 173.13
N e t R e v e n u e 67,056 62,483 5,748
O p e r a t i n g I n c o m e 5,828 4,403 405
N e t I n c o m e 12,144 11,776 1,083
Earnings per Shareï¼ˆUSDï¼‰(*) 0.75 0.73 67.05
ï¼ˆUS GAAP , 1US$=92yenï¼‰
Appendix (Tentative translation of a part of Japanese press release)
(*)Capital Stock, Ratio of Major Shareholders and Earnings per Share are calculated on the basis
that preferred stocks are converted into common stocks.
(**)Amounts and ratios are rounded.
For about 250 Million USD
Anticipated Closing Date June 30, 2010ï¼ˆScheduledï¼‰
5ï¼ŽProspects of the future
Appraisal of goodwill and intangible asset s regarding this acquisition is on going. Period of amortization
are determined later. Since there are many unforeseeable factors in Rakuten’s internet and financial
business, Rakuten has not historically disclosed any financial forecasts.