Naver, South Korea’s answer to Google, buys Poshmark for $1.2 billion

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South Korea’s largest web portal operator Naver announced on Friday that it had agreed to buy U.S. e-commerce site Poshmark, in what would be one of the biggest technology deals in the country to date…Naver said it will acquire all of Poshmark’s shares at $11 per share in cash, including the assumption of its net debt.

According to a Monday announcement, Naver, a massive South Korean internet company, would pay around $1.2 billion to acquire Poshmark, an American online shop. Shares of Poshmark increased by as much as 14% during extended trading.

In the all-cash transaction, Naver will pay $17.90 per share. Poshmark ended on Monday at $15.57, while shares of the South Korean internet titan fell more than 7% during the Asian trading session.

In South Korea, Naver runs a search engine, an online store, and other services. The agreement, according to the firms, would expand Naver’s online retail footprint while enabling Poshmark to expand internationally.

Poshmark is a well-known online retailer that enables customers to purchase from other users’ closets. The firm went public in January 2021 at a price of $42 per share, entering the market as investors flocked to tech companies and internet shopping was on the rise because of the Covid-19 epidemic.

The stock has now plunged precipitously along with the rest of the IT sector.

According to Naver and Poshmark, the merger would result in “substantial revenue and expense savings,” including a near-term acceleration of annual revenue growth exceeding 20% as ad monetization, international investment growth, and live commerce usage all increase.

The agreement furthers current market concentration for used apparel. Depop, a clothes resale app, was purchased by Etsy last year for $1.62 billion. Poshmark, ThredUp, and other resale platforms are competitors of Depop.

At 9 p.m. ET on Monday, the businesses will hold a conference call to go over the acquisition.

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