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Pitney Bowes Buys Borderfree For $395M
by Zacks Equity Research.
Leading global technology company Pitney Bowes Inc. has inked a definitive agreement with the global e-commerce giant Borderfree to buy the latter for $395 million. The deal aims to expand Pitney Bowes’ e-commerce capabilities as well as simplify cross-border Internet trading. Following the news, which was announced after market close on Tuesday, May 5, shares of Borderfree surged 102% in after-hours trading.Per the agreement, Pitney Bowes plans to offer a tender for all outstanding common shares of Borderfree at $14.00 apiece or an approximate aggregate value of $395 million in cash. Expected to close by the second quarter of 2015, the deal is subject to approval by shareholders of Borderfree and other customary conditions.
Borderfree, powered by a proprietary technology and services platform, provides comprehensive e-commerce solutions to large-scale retailers in the U.S. and U.K. The company serves a diverse spectrum of customers that include apparel brands, lifestyle brands and departmental stores. In 2014, the company had generated revenues to the tune of $125 million.
Pitney Bowes’ acquisition of Borderfree comes as no surprise, as the latter’s cross-border e-commerce portfolio is suitable to complement the formers digital commerce products. This buyout will not only strengthen Pitney Bowes’ portfolio but also provide its clients with an opportunity to expand in the dynamic global e-commerce market.
Our Take
We believe the latest acquisition mirrors the company’s long-term vision to grow its digital business on a global scale. Pitney Bowes’ profound market knowledge on commerce and logistics, coupled with Borderfree’s expertise in cross-border e-commerce, places the former at a vantage point for exploring the e-commerce industry.
Moreover, the importance of cross-border e-commerce in maximizing the global presence of businesses, as a better alternative to brick-and-mortar outlets, has given rise to rapid demand for it. This, in turn, is expected to unlock a plethora of commercial possibilities for Pitney Bowes, going forward.
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