PayPal To Acquire Xoom For $890 Mln. Enterprise Value

(RTTNews) - PayPal Inc on Wednesday agreed to buy Xoom Corp (XOOM), a digital money transfer provider, for $25 per share in cash or an approximate $890 million enterprise value.

The deal represents a premium of 32% over Xoom's three-month volume-weighted average price.

The deal, expected to close in the fourth quarter of 2015. was unanimously approved by the boards of of both companies, as well as the board of eBay Inc (EBAY), PayPal's parent company.

Due to anticipated one-time integration costs, the completion of the transaction is expected to be slightly dilutive to PayPal's non-GAAP earnings per share for FY 2016.

Dan Schulman, President of PayPal, said, "Acquiring Xoom allows PayPal to offer a broader range of services to our global customer base... Xoom's presence in 37 countries - in particular, Mexico, India, the Philippines, China and Brazil - will help us accelerate our expansion in these important markets."

Upon closing of the acquisition, Xoom will operate as a separate service within PayPal.

Holders of approximately 18% of Xoom's outstanding shares, including all executive officers and directors of Xoom and certain entities affiliated with Sequoia Capital, have entered into voting and support agreements with PayPal pursuant to which they have agreed to vote in favor of the deal.

Xoom shares gained $1.51 or 7.29% at $22.21 in after-hours trade on the Nasdaq.