Poshmark to be bought by South Korean internet company Naver in $1.2 billion deal

The companies announced Monday that Naver, a South Korean internet company, will acquire Poshmark in a deal valued at over a billion dollars.

Naver will acquire Poshmark's outstanding shares for $17.90 in cash, representing a 15% upside to Poshmark's Monday closing price. The transaction is expected to be approved by the Poshmark shareholders in the first quarter of 2019.

In late 2020, Poshmark went public at $42 a share, and ended its first day of trading at more than $100 a share, but has never reached those heights again. Naver will pay more than the acquisition price for it.

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In a statement, executives from both companies talked up the potential to combine Naver's array of search, e- commerce, artificial intelligence and social media technology with Poshmark's social and shopping platforms. In the medium-term, the companies said, they would embark on a bigger international expansion strategy.

They talked about the potential for the combined company to save $30 million annually within two years after the deal's closing through "rationalization of public company costs" and higher operating leverage, as well as the potential for more than 20% yearly sales growth by using Naver's advertising resources.

Naver said the move would broaden its e-commerce platform, bring younger users into the company, and allow it tocapitalize on the global online fashion re-commerce and sustainable economy opportunity.

The chief executive of Naver said in a statement that Naver's leading technology in search, artificial intelligence recommendation and e- commerce tools will help power the next phase of Poshmark's global growth.

Naver owns companies like Wattpad, a social-media platform, and runs Webtoon, a site for digital comics, along with a metaverse platform called Zepeto. Naver said its online community in Korea has more than 36 million monthly users.

The deal will give Poshmark opportunities to grow, according to the chief executive.

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 experience, and enter new and large markets.

Naver said the acquisition would give it a bigger foothold in the U.S.

Live-stream shopping is a key driver of e- commerce in China and Korea, allowing shoppers to buy products in real-time through live video broadcasts, enabling greater insights and more clarity around purchasing decisions.

Naver and Poshmark will have the same management team, brand and headquarters once the deal closes.

The shares of Poshmark were down 9% at the close of Monday's trading. Over that time, the S&P 500 index has fallen 23%.