eBay Inc (NASDAQ:EBAY) shares rose 3% to $41.64 in late-morning trading on Wednesday after the online marketplace announced it is selling its remaining shares in the online classified business Adevinta to private equity firms Permira and Blackstone for $2.2 billion in cash and 20% equity in the newly privatized company.
Adevinta had originally acquired eBay's own classified business back in 2020 and now intends to go private.
eBay stated the funds will used for "general corporate purposes," and says it remains committed to returning 125% of its cumulative free cash flow to shareholders through a combination of both repurchases and dividends over the three-year period, which runs through 2024.
eBay expects the sale, which still needs to go through regulatory approval, to close in the second quarter of 2024.
The company had sold part of its stake in Adevinta for $2.25 billion in 2021.
During its most-recently reported quarter (3Q), eBay reported adjusted earnings of $1.03 per share on sales of $2.5 billion, roughly in line with expectations of $1 per share on revenue of $2.5 billion.
Shares of eBay have fallen about 1% year to date.
Contact Sean at sean@proactiveinvestors.com