The eBay auction for Skype ended, and the winner of a stake of approximately 65% in the Internet-telephony provider was an investor group led by Silver Lake and including Index Ventures, Andreessen Horowitz and the Canada Pension Plan Investment Board.
The online-auction company will receive approximately $1.9 billion in cash upon the completion of the sale, which obviously topped its reserve price, and a note from the buyer in the principal amount of $125 million. eBay will retain an equity investment in Skype of approximately 35%.
eBay originally announced its intent to part with Skype in April via an initial public offering in 2010, but the company said it would consider bids in the interim.
eBay president and CEO John Donahoe said:
This is a great deal, unlocking both immediate and long-term value for eBay and tremendous potential for Skype. We’ve acted decisively on a deal that delivers a high valuation, gives us significant cash upfront and lets us retain a meaningful minority stake with talented partners. Skype is a strong stand-alone business, but it does not have synergies with our e-commerce and online-payments businesses. As a separate company, we believe Skype will have the focus required to compete effectively in online voice and video communications and accelerate its growth momentum.
This deal achieves our goal of delivering short- and long-term value to eBay and its stockholders, without the possible delays and market risk of an IPO. Selling Skype now at this great valuation, while retaining an equity stake, makes sense for the company. And it allows us to focus all of our energies on the opportunities in front of PayPal and eBay.
Silver Lake managing director Egon Durban added:
Skype is an innovative, next-generation company that has changed how people and businesses communicate with each other. This transaction benefits all parties involved and will allow Skype the opportunity to accelerate the growth of its business by harnessing the deep technological and company-development expertise that resides within the investor group. Josh Silverman has done a strong job leading the company, and we look forward to working with Josh and his team to grow the Skype franchise.