EBay in $925m disposal as PayPal spin-off nears
EBay has sold its Enterprise arm for $925m (£593m) and beat forecasts for its second-quarter profits as it prepares to spin off PayPal.
Enterprise, which manages websites for retailers, has been bought by a group of private equity firms led by Permira and Sterling Partners. EBay's net income for the quarter was $83m, excluding a $786m charge for the Enterprise sale. Revenues for eBay-PayPal, which will split on Friday, were up 7% to $4.37bn, The Enterprise division, formerly known as GSI Commerce, was bought by eBay for $2.4bn in 2011. It has lost customers and seen slow growth in the past few years with clients moving their online operations in-house. Shares in eBay, which also announced an additional $1bn share buyback program, were up more than 4% in midday trading on Wall Street. Analysts were bullish on eBay's prospects as a standalone company. "EBay will not grow nearly as fast as PayPal, but it is a very profitable business that generates tremendous amount of cash - some of which they will be able to return to shareholders," Wedbush Securities analyst Gil Luria told Reuters. PayPal is due to begin trading separately on the Nasdaq on 20 July, creating a new company that some analysts say will be worth about $40bn.