PayPal to buy Xoom for US$890m cash
Ebay's PayPal unit is buying Xoom for US$890 million cash in a bid to expand into international money transfers.
Xoom is a San Francisco-based digital money-transfer provider. The company's technology lets US customers send money to, and pay bills for, family and friends worldwide with their mobile phones, tablets and computers.
PayPal said Wednesday that it is paying US$25 per share for Xoom Corp, a premium of nearly 21 per cent over the company's closing price of US$20.70.
PayPal said Xoom's presence in 37 countries, including key markets like Mexico, India, the Philippines, China and Brazil will accelerate its expansion.
The acquisition is expected to close in the fourth quarter, subject to approval by Xoom shareholders and antitrust regulators and other closing conditions.
PayPal itself is splitting off into an independent company later this month. The board of San JosÈ, California-based eBay Inc last week approved the PayPal split, a plan that had first been announced in September. PayPal will start trading on the Nasdaq under the ticker symbol 'PYPL' on July 20.
Xoom went public in February 2013 at US$16 per share and jumped nearly 60 per cent on its first day of trading. In extended trading after the PayPal announcement, Xoom's shares rallied to US$25.20 while eBay shares rose to US$60.59.