PayPal parent eBay has confirmed that it has agreed an $800 million cash deal to buy Chicago-based payments start-up Braintree.
Another typo in the first paragraph of this article too. Is anyone proofreading your material?
"The firm processes more than $12 billion in payments annually for over 4000 merchants $4 billion".... What?
Leaving all that aside, the potential multiples on this deal and the all cash structure suggest Braintree scored BIG.
Assuming a net gross margin of 80 bp (on $12 Billion sales), the $800 million cash purchase works out as an 8.3 net-margin multiple. The EBITDA multiple seems as if it could be 25-30x.
It's interesting that mainline bank and third party acquirers seemed to never get into the bidding, which is a real big mistake. Most of the traditional acquirers are puttering along making use of archaic costly processing and accounting systems, making
tiny tid-bit innovations around the permitters of their systems and services that have little meaningful effect on their market positions or long-term viability.
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