London-based QXL.com (Nasdaq: QXLC), Europe’s largest online auction company, has announced the acquisition of Swedish rival Bidlet AB for as much as $555 million (US$) in stock.
The deal will give QXL a business-to-consumer online auction base in Sweden, Norway, Denmark and Finland to expand on its existing consumer-to-consumer auction base in Norway and Denmark.
Launched in April of last year, Bidlet was ranked the number one e-commerce site in Sweden with 257,000 unique visitors in December. The company has 170,000 registered users and booked 1999 revenues of approximately $4 million and a net loss of approximately $6 million.
QXL has approximately 500,000 registered users in the UK, Spain, Germany, France, Italy, The Netherlands, Denmark and Norway. The company booked third quarter revenue of $2.6 million and a net loss of approximately $17 million.
Emphasis on Mobile Access
“This is a significant step for QXL. Bidlet provides a basis for accelerated growth in Scandinavia, which is technologically ahead of the rest of Europe in a number of areas, such as mobile communications,” said QXL CEO Jim Rose.
QXL has focused on mobile communications as an innovative means to tap into the European market. The company announced a strategic alliance with a European Internet portal last week that will allow users to track the status of auctions via their mobile phones.
Fending off Competitors
The Bidlet deal is the latest in a string of acquisitions by QXL. The company bought the number one auction sites in Norway and Denmark in November and December and also bought its way into the Spanish online auction market.
The new acquisition will allow QXL to keep pace with eBay (Nasdaq: EBAY) and German rival Ricardo.de AG, a fast-growing auction site that claims 500,000 registered users, as well as other European competitors.
For its part, Ricardo.de has announced the acquisition of Auktion 24.ch, Switzerland’s largest online auction site, for an undisclosed sum. The acquisition gives Ricardo.de a stronger presence in Germany, the UK, The Netherlands, Austria and Switzerland, with new sites planned for Italy and France.
QXL Founder Leaves Board
QXL also announced today that founder Tim Jackson has resigned from the board and will become a special advisor to Rose. In a statement, Jackson said he is excited about the acquisition of Bidlet and supports the company’s current management strategy. He did not give a reason for his resignation.
In early trading today, investors cast a positive vote for the acquisition. QXL’s share price soared over 26 percent after the opening bell.