By Joyce Lee
SEOUL (Reuters) -South Korean tech firm Naver Corp said on Tuesday it agreed to a $1.6 billion deal to buy Poshmark Inc, a U.S. apparel resale platform firm, as a strategic investment to enter the U.S. e-commerce market.
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 the enterprise value of Poshmark is about $1.2 billion, a Naver spokesperson said.
Poshmark is the largest fashion consumer-to-consumer platform in North America, with 80 million registered users led by Millenial and Gen Z active 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 target an $80 billion market in online fashion “re-commerce” in the U.S., which is expected to grow by 20% annually to $130 billion by 2025, according to Activate Consulting.
Poshmark shares jumped 14% to $17.8 in after-hours trading on Monday. However, shares in Naver fell 5.2% as of 0120 GMT, versus a rise of 2.3% in the wider market.
Naver acquired North American online literature platform Wattpad for about $600 million last year.
(Reporting by Joyce Lee; Editing by Christian Schmollinger and Christopher Cushing)