By Joyce Lee
SEOUL (Reuters) – South Korean tech company Naver Corp said on Tuesday it had closed a $1.6 billion deal to buy Poshmark Inc, a US apparel resale platform, as a strategic investment to enter the US E- Commerce market has agreed.
Naver will acquire all of the issued and outstanding shares of Poshmark for $17.90 in cash. The deal is expected to close in the first quarter of next year.
The $1.6 billion includes consideration for Poshmark’s cash holdings and Poshmark’s enterprise value is approximately $1.2 billion, a Naver spokesman said.
Poshmark is the largest consumer-to-consumer fashion platform in North America with 80 million registered users, led by active millennial and Gen Z users, Naver and Poshmark said in a conference call about the deal.
The deal will combine Poshmark’s shopping platform with Naver’s technology, including image recognition, artificial intelligence and live streaming, a key driver of e-commerce in South Korea, the companies said in a statement.
The companies plan to capture an $80 billion U.S. online fashion re-commerce market, which Activate Consulting predicts will grow 20% annually to $130 billion by 2025.
Shares of Poshmark rose 14% to $17.8 in after-hours trading on Monday. However, shares of Naver fell 5.2% by 0120 GMT versus a 2.3% rise in the broader market.
Naver acquired North American online literature platform Wattpad for around $600 million last year.
(Reporting by Joyce Lee; Editing by Christian Schmollinger and Christopher Cushing)