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South Korean internet giant Naver is acquiring US e-retailer Poshmark for around $1.2 billion, the companies announced on Monday. Poshmark shares plummeted as much as 14% in extended trading.
Naver is paying $17.90 per share in the all-cash deal. Shares of the South Korean internet giant fell more than 7% in the Asian trading session, while Poshmark closed at $15.57 on Monday.
Naver operates a search engine, e-commerce platform and other services in South Korea. The companies said the deal will deepen Naver’s reach in online retail and allow Poshmark to enter international markets.
Poshmark is a popular online retail site that allows people to shop in other users’ closets. The company went public in January 2021 at $42 per share, coming at a time when online shopping was booming due to the Covid-19 pandemic and investors were flocking to tech stocks.
Since then, the stock has fallen sharply, crashing along with the rest of the tech industry.
Naver and Poshmark said they expect the deal to generate “significant revenue and cost synergies,” including near-term reacceleration in annual revenue growth to over 20% as ads improve monetization, increase overseas investment and live commerce gains wider adoption finds.
The deal adds to the recent consolidation in the second-hand clothing market. Etsy acquired fashion resale app Depop for $1.62 billion last year. Depop competes with Poshmark and other resale services like ThredUp.
The companies will host a conference call Monday at 9:00 p.m. ET to discuss the deal.
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