Poshmark stockholders to receive $17.90 per
share in cash
Acquisition expands and diversifies Naver’s
leading e-commerce platform, strengthens its community with a
global social network of younger users, and positions it to
capitalize on the global online fashion re-commerce and sustainable
economy opportunity
Extends Poshmark’s leadership and capitalizes
on changing consumer trends through new technology investments,
international expansion, and category and product evolution
Naver Corp. (KRX: 035420) (“Naver”), Korea’s largest internet
company, and Poshmark, Inc. (NASDAQ: POSH) (“Poshmark”), a leading
social e-commerce marketplace for new and secondhand style, today
announced that they have entered into a definitive agreement under
which Naver will acquire all of the issued and outstanding shares
of Poshmark for $17.90 in cash, representing an enterprise value of
approximately $1.2 billion.1 This represents a premium of 15% to
Poshmark’s closing stock price as of October 3, 2022, a 34% premium
to the 30-day volume weighted average price, and a 48% premium to
the 90-day volume weighted average price of Poshmark’s shares.
Management Commentary
Choi Soo-Yeon, Chief Executive Officer of Naver:
“The combination will create the strongest
platform for powering communities and re-fashioning commerce.
Poshmark is the definitive brand for fashion in the United States
that provides a social network for buying and selling apparel.
Naver’s leading technology in search, AI recommendation and
e-commerce tools will help power the next phase of Poshmark’s
global growth.”
“Poshmark is a natural fit for our business –
our two companies share a common set of values and vision around
content, community and empowerment. Bringing Naver and Poshmark
together will immediately put us at the forefront of creating a
new, socially responsible, and sustainable shopping experience
designed around sellers of all sizes and interests – from
individual and influencer sellers to professional sellers, brands
and specialty boutiques – and a large, loyal, and highly engaged
social community. We are excited to work closely with Manish and
his talented team to create lasting value for all our
stakeholders.”
Manish Chandra, Founder and Chief Executive Officer of
Poshmark:
“The opportunity to join forces with Naver –
one of the world’s leading and most innovative and successful
internet companies – is a testament to the strength of our brand,
operating model, and what we’ve built over the last decade with our
talented team and amazing community. Our industry continues to
evolve at a rapid pace, and we are excited to continue to lead the
future of shopping by providing our community with an unparalleled
experience that is simple, social, fun and sustainable.”
“This is a highly compelling opportunity for
our employees, who will benefit from being part of a larger, global
organization with shared values and complementary strengths. This
transaction also delivers significant and immediate value to our
shareholders. Longer term, as part of Naver, we will benefit from
their financial resources, significant technology capabilities, and
leading presence across Asia to expand our platform, elevate our
product and user experiences, and enter new and large markets. I
look forward to partnering with Naver as we take our company into
its next phase of growth.”
Redefining Commerce and Community Around a Shared
Vision
The inherent strengths of both companies lie in their unwavering
commitment to content, community and empowerment:
- Content. Naver is home to the largest number of bloggers
in Korea and the largest number of digital creators of stories
(Wattpad) and comics (Webtoons) globally. Poshmark is a leader in
creating unique styles and fashion trends, including the growing
K-Fashion apparel segment.
- Community. Naver is the largest and longest-standing
online community in Korea, where more than 36 million monthly users
access its search portal and various online community services. Its
metaverse platform, Zepeto, is the second largest metaverse app in
the world, with a growing, vibrant community for members to create
and share whatever they imagine. Naver’s community also extends to
other large, fast-growing, and highly engaged groups, including its
K-Pop fandom community Weverse, which is jointly owned with BTS’
management company, one of the most successful groups of all time.
Poshmark is the destination of choice for more than 80 million
registered users. Among them, active users spend approximately 25
minutes of their day buying and selling apparel online, and gather
in-person at Posh Party Live events held in various cities around
the world.
- Empowerment. Naver is dedicated to empowering the long
tail – it is the largest enabler of e-commerce for small and
medium-sized businesses in Korea and has revolutionized content
creation by democratizing the publication of digital comics through
Naver Webtoons. At Poshmark, anyone can easily list and sell what
is hanging in their closet at home, and anyone can make a social
impact through the promotion of socially responsible, sustainable
commerce.
The transaction will create a global player in online fashion
re-commerce by combining Poshmark’s unique discovery-based social
shopping platform and deeply engaged community with Naver’s
technological prowess in upleveling the e-commerce experience.
Poshmark will also leverage Naver’s proven expertise and track
record in Asia and its significant expertise from backing and
investing in other fashion and consumer-to-consumer (C2C)
e-commerce platforms globally.
The combination accelerates Naver’s strategy to build a global
e-commerce community portfolio to capture the growth in large
markets around the world, including Poshmark’s home market of North
America. Together, the companies expect to increase purchase
conversion rates, deepen user engagement, create an industry leader
in livestreaming commerce, and enhance the unique relationship- and
discovery-based experiences that are driving fast-growing
re-commerce verticals.
Strategic and Financial Benefits
- Expands Long-Term Opportunity in Fashion Re-commerce and
Creates Globally Distributed User Base with Influx of Younger
Users: The addition of Poshmark will expand and diversify
Naver’s search-driven e-commerce business into the global
secondhand C2C market for fashion. The combination will also allow
Naver to capitalize on the increasing consumer shift in fashion to
online re-commerce, which is an $80 billion market today in the
U.S. alone, and is expected to grow by 20% annually to $130 billion
by 2025.2 Poshmark currently has a community of over 80 million
registered users, across 90% of zip codes in the U.S. In 2021, the
company generated approximately $2 billion in gross merchandise
value (GMV) with a take rate of 20% and gross margin of 85%. Its
primary demographic of millennials and Generation Z users is the
largest shopping demographic for secondhand goods and a key driver
of the circular economy and community-based platforms. One of
Poshmark’s strong appeals to the growing number of conscious
consumption shoppers is the important role it plays in extending
the lifecycle of millions of previously made items and reducing
fashion’s footprint. These users will expand and complement Naver’s
current user base.
- Creates a Global Commerce Community with Access to
Poshmark’s Social Networking and Discovery-Based Shopping:
Naver is a proven community builder, connecting more than 28
million monthly users across its Naver Café platform – an open
social community where users create their own groups to share
content, ideas, and information broadly, across a large number of
topics and categories – as well as its Metaverse and K-Pop fandom
communities. Poshmark has created unique relationship-oriented
“micro” communities that are based around social engagement with
friends and family and discovery-based shopping. Poshmark’s simple,
easy, and community-centered fashion marketplace will give Naver
access to a highly engaged and diversified community, where sellers
become buyers and buyers become sellers, and add a global social
networking element to Naver’s portfolio of services.
- Enhances Poshmark’s User Experience with Naver’s Unrivaled
and Innovative Technology Offerings: Poshmark will instantly
benefit from Naver’s deep technology stack and AI-based
capabilities, including its smart lens image recognition and search
technologies. These capabilities are highly complementary to
Poshmark’s product development strategy, and together will allow
Poshmark to offer a new search and shopping experience by
integrating Naver’s shopping search engine, which allows users to
enter additional search keywords according to their preference on
colors, designs, and materials. Specifically, with access to
Naver’s image recognition technology, Poshmark users will be able
to identify where to find and buy products by scanning objects and
shopping through the camera on their phones without needing to know
the exact name of the product. This capability will make it easier
to both identify new products and sell items, enhancing the user
experience.
- Leverages Naver’s Proven Data Analytics Technology to
Improve Marketing and Engagement Strategies to Make Poshmark the
Platform of Choice for Buyers and Sellers: As the largest
advertising platform in Korea, Naver’s ad-serving infrastructure
will play an instrumental role as Poshmark explores rolling out ads
to its deeply engaged community. For instance, Poshmark will be
able to leverage Naver’s “Biz Advisor” and “Analytics” AI
analytical tools, which analyze sales statistics to manage data
more effectively, and in turn, increase the number of sellers on
Poshmark’s platform. These enhancements will dramatically advance
Poshmark’s service offering, resulting in greater customer
acquisition, retention, and buyer conversion, as well as enhance
its community engagement and user experiences. With Naver Pay
commanding the largest share of online payment processing in Korea,
the combination will also enable Poshmark to develop innovative
payment solutions to expand its ecosystem of buyers and sellers.
Additionally, with Naver’s technologies, Poshmark will be able to
provide more suitable product recommendations for customers after
analyzing products, user communities, and the closets of the users’
favorite sellers in real-time. Together, the companies can develop
a service that allows users to search with shopping keywords so
that the most suitable product will be recommended to the right
user.
- Enables Global Live Commerce Adoption: Livestream
shopping is a key driver of e-commerce in China and Korea (and
increasingly in the U.S.) today, allowing shoppers to buy products
in real-time through live video broadcasts, enabling greater
insights and more clarity around purchasing decisions. Naver’s
Shopping Live solution is the leader in Korea, one of the world’s
largest live shopping markets, and an essential feature of Naver’s
e-commerce platform with over $25 billion in GMV transacted in
2021. Naver expects that the enablement and enhancement of live
streaming capabilities within the Poshmark platform will transform
the shopping and selling experience and strengthen Poshmark’s
community by allowing for greater social networking and
engagement.
- Further Expands Global Footprint for Both Naver and
Poshmark: Poshmark will benefit from Naver’s global presence in
high-growth markets, particularly in Korea, one of the world’s most
innovative and highest penetrated e-commerce industries. This is
where Naver is the leading search engine and largest e-commerce
channel, and the only search technology company in the world that
has successfully expanded into an e-commerce platform. Naver’s
footprint also includes Japan, where it has joint ownership in Z
Holdings, one of the world’s largest internet service groups, with
assets such as Yahoo! Japan and Japan’s leading smartphone
messaging platform, LINE, which Naver created and launched in 2011
and now operates in over 230 countries and is used by more than 70%
of those populations. With Naver’s support, Poshmark will pursue a
broader international expansion strategy in the medium-term,
including into other developed markets in Asia. In addition, this
transaction provides Naver with an enhanced foothold in the U.S.,
expanding its international profile, which it has steadily
increased both organically and through investments over the past 20
years. Naver will build on its existing U.S. footprint, including
Webtoon Entertainment, which is based in Los Angeles and extremely
popular with younger audiences, and its $600 million acquisition of
Wattpad in 2021. Naver has benefited from the recent global digital
disruption and transformation of media and publishing through
Wattpad and Webtoon Entertainment, and looks to extend their growth
in the region with the addition of Poshmark.
- Significant Synergy Potential: The transaction is
expected to generate significant revenue and cost synergies,
consisting primarily of:
- Re-acceleration of annual revenue growth beyond 20% in the
near-term by leveraging Naver’s advertising capabilities to drive
further monetization, accelerating investment to drive growth
overseas, and expanding live commerce adoption.
- Approximately $30 million in run-rate annual cost savings
within 24 months post-closing including through rationalization of
public company costs and driving of higher operating leverage
across operating and other cost functions.
Operating Structure and Leadership
Upon completion of the transaction, Poshmark will become a
standalone U.S. subsidiary of Naver and will continue to be led by
CEO Manish Chandra and Poshmark’s current management team.
Poshmark will continue to operate under its existing brand, as
well as maintain its employee base, Poshmark community, and
headquarters in Redwood City, California.
Transaction Details
The transaction, which was unanimously approved by both Naver’s
and Poshmark’s Boards of Directors, is expected to close by the
first quarter of 2023, subject to approval by Poshmark stockholders
and the satisfaction of certain other customary closing conditions.
The transaction is not contingent on any financing.
Naver has secured voting and support agreements with certain
stockholders of Poshmark, representing approximately 77% of the
outstanding voting power of Poshmark common shares.
The transaction is expected to be funded with Naver’s cash
balances and other existing financing sources.
Conference Call / Webcast Information
Naver and Poshmark will host a conference call for investors and
media at 10:00am Korea Standard Time today (9:00pm Eastern Time /
6:00pm Pacific Time) to discuss the announcement.
Pre-registration is required to join the conference call and can
be accessed using the following links: Korean:
http://pin.teletogether.com / English:
http://pin.teletogether.com/eng and log-in passcode 385074.
A webcast of the call can be accessed using the following links
Korean: https://irsvc.teletogether.com/naver/naver20221004_kor.php
/ English:
https://irsvc.teletogether.com/naver/naver20221004_eng.php or by
dialing 031 810 3141 for domestic calls and +82 31 810 3142 for
international calls using the passcode 385074# + your personal
access number.
Advisors
LionTree LLC is serving as Naver’s exclusive financial advisor
and Kirkland & Ellis LLP is serving as Naver’s legal counsel.
Goldman Sachs & Co. LLC is serving as exclusive financial
advisor to Poshmark, and Goodwin Procter LLP is serving as
Poshmark’s legal counsel.
About Naver
Founded in 1999, Naver is Korea’s oldest surviving start-up and
today the country’s largest internet company. Naver operates
Korea’s No.1 search engine and largest e-commerce platform, and is
a leading provider of fintech services, digital content and cloud
services to a global community. Naver cultivates a culture of
‘Founder-type leaders’ who continue to launch innovative mobile
applications, including LINE (Japan’s No.1 messaging app), Zepeto
and Webtoons.
About Poshmark
Poshmark is a leading social marketplace for new and secondhand
style for women, men, kids, pets, home and more. By combining the
human connection of physical shopping with the scale, ease, and
selection benefits of e-commerce, Poshmark makes buying and selling
simple, social, and sustainable. Its community of more than 80
million registered users across the U.S., Canada, Australia, and
India is driving the future of commerce while promoting more
sustainable consumption. For more information, please visit
www.poshmark.com, and for company news and announcements, please
visit investors.poshmark.com. You can also find Poshmark on
Instagram, Facebook, Twitter, TikTok, Pinterest, YouTube, and
Snapchat.
Additional Information and Where to Find It
In connection with the proposed transaction between Poshmark
(the “Company”) and Naver (“Naver”), the Company will file with the
SEC a Proxy Statement, the definitive version of which will be sent
or provided to Company stockholders. The Company may also file
other documents with the SEC regarding the proposed transaction.
This document is not a substitute for the Proxy Statement or any
other document which the Company may file with the SEC. INVESTORS
AND SECURITY HOLDERS ARE URGED TO READ THE PROXY STATEMENT AND ANY
OTHER RELEVANT DOCUMENTS THAT ARE FILED OR WILL BE FILED WITH THE
SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS
AND DOCUMENTS INCORPORATED BY REFERENCE THEREIN, CAREFULLY AND IN
THEIR ENTIRETY BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT
INFORMATION ABOUT THE PROPOSED TRANSACTION AND RELATED MATTERS.
Investors and security holders may obtain free copies of the Proxy
Statement (when it is available) and other documents that are filed
or will be filed with the SEC by the Company through the website
maintained by the SEC at www.sec.gov, the Company’s investor
relations website at investors.poshmark.com or by contacting the
Company’s investor relations department at the following:
IR@Poshmark.com.
Participants in the Solicitation
NAVER and certain of its directors and executive officers may be
deemed to be participants in the solicitation of proxies from
Poshmark’s stockholders in respect of the proposed transaction and
any other matters to be voted on at the special meeting.
Information regarding Poshmark’s directors and executive officers,
including a description of their direct interests, by security
holdings or otherwise, will be included in the Proxy Statement
(when available). Poshmark stockholders may obtain additional
information regarding the direct and indirect interests of the
participants in the solicitation of proxies in connection with the
proposed transaction, including the interests of Poshmark directors
and executive officers in the proposed transaction, which may be
different than those of Poshmark’s stockholders generally, by
reading the Proxy Statement and any other relevant documents that
are filed or will be filed with the SEC relating to the proposed
transaction. You may obtain free copies of these documents using
the sources indicated above.
Cautionary Statement Regarding Forward Looking
Statements
This communication contains “forward-looking statements” within
the meaning of the federal securities laws, including Section 27A
of the Securities Act of 1933, as amended, and Section 21E of the
Exchange Act. These forward-looking statements are based on NAVER’s
current expectations, estimates and projections about the expected
date of closing of the proposed transaction and the potential
benefits thereof, its business and industry, management’s beliefs
and certain assumptions made by NAVER and Poshmark, all of which
are subject to change. In this context, forward-looking statements
often address expected future business and financial performance
and financial condition, and often contain words such as “expect,”
“anticipate,” “intend,” “plan,” “believe,” “could,” “seek,” “see,”
“will,” “may,” “would,” “might,” “potentially,” “estimate,”
“continue,” “expect,” “target,” similar expressions or the
negatives of these words or other comparable terminology that
convey uncertainty of future events or outcomes. All
forward-looking statements by their nature address matters that
involve risks and uncertainties, many of which are beyond our
control, and are not guarantees of future results, such as
statements about the consummation of the proposed transaction and
the anticipated benefits thereof. These and other forward-looking
statements, including the failure to consummate the proposed
transaction or to make or take any filing or other action required
to consummate the proposed transaction on a timely matter or at
all, are not guarantees of future results and are subject to risks,
uncertainties and assumptions that could cause actual results to
differ materially from those expressed in any forward-looking
statements. Accordingly, there are or will be important factors
that could cause actual results to differ materially from those
indicated in such statements and, therefore, you should not place
undue reliance on any such statements and caution must be exercised
in relying on forward-looking statements. Important risk factors
that may cause such a difference include, but are not limited to:
(i) the ability of the parties to consummate the proposed
transaction in a timely manner or at all; (ii) the satisfaction (or
waiver) of closing conditions to the consummation of the proposed
transaction; (iii) potential delays in consummation the proposed
transaction; (iv) the ability of NAVER to timely and successfully
achieve the anticipated benefits of the proposed transaction; (v)
the occurrence of any event, change or other circumstance or
condition that could give rise to the termination of the merger
agreement; (vi) the impact of the COVID-19 pandemic and the current
conflict between the Russian Federation and Ukraine on NAVER’s
business and general economic conditions; (vii) NAVER’s ability to
implement its business strategy; (viii) significant transaction
costs associated with the proposed transaction; (ix) potential
litigation relating to the proposed transaction; (x) the risk that
disruptions from the proposed transaction will harm NAVER’s
business, including current plans and operations; (xi) the ability
of NAVER to retain and hire key personnel; (xii) potential adverse
reactions or changes to business relationships resulting from the
announcement or completion of the proposed transaction; (xiii)
legislative, regulatory and economic developments affecting NAVER’s
business; (xiv) general economic and market developments and
conditions; (xv) the evolving legal, regulatory and tax regimes
under which NAVER operates; (xvi) potential business uncertainty,
including changes to existing business relationships, during the
pendency of the merger that could affect NAVER’s financial
performance; and (xviii) unpredictability and severity of
catastrophic events, including, but not limited to, acts of
terrorism or outbreak of war or hostilities, as well as NAVER’s
response to any of the aforementioned factors. These risks, as well
as other risks associated with the proposed transaction, will be
more fully discussed in the Proxy Statement to be filed with the
SEC in connection with the proposed transaction. While the list of
factors presented here is, and the list of factors presented in the
Proxy Statement will be, considered representative, no such list
should be considered to be a complete statement of all potential
risks and uncertainties. Unlisted factors may present significant
additional obstacles to the realization of forward-looking
statements. Consequences of material differences in results as
compared with those anticipated in the forward-looking statements
could include, among other things, business disruption, operational
problems, financial loss, legal liability and similar risks. The
forward-looking statements included herein are made only as of the
date hereof. NAVER does not assume any obligation to publicly
provide revisions or updates to any forward-looking statements,
whether as a result of new information, future developments or
otherwise, should circumstances change, except as otherwise
required by securities and other applicable laws.
_________________________ 1 Assumes $436 million of unrestricted
cash on balance sheet as of June 30, 2022 2 Activate Consulting
View source
version on businesswire.com: https://www.businesswire.com/news/home/20221003006050/en/
Naver Investors kimoon.kwon@navercorp.com KWON Kimoon:
+82 10 2506 1320
Media dl_naverpr@navercorp.com SOHN Seohee: +82 10 9818 8819
HWANG Jaehyun: +82 10 5220 8711
FGS Global Naver@FGSGlobal.com
Poshmark Investors IR@Poshmark.com
Media PR@Poshmark.com
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