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Stamps.com to Acquire Endicia

Stamps.com will acquire Endicia for $215 million in cash pending regulatory approval, including antitrust scrutiny courtesy of the Hart-Scott-Rodino Act. The two companies provide online postage solutions, including solutions for online sellers.

Stamps.com said the move would help it compete against larger companies, including Pitney Bowes and eBay. The latter offers its sellers the ability to print postage labels at no charge. Pitney Bowes also powers eBay’s Global Shipping Program for cross border transactions.

Endicia cofounder and General Manager Amine Khechfe reassured customers in a letter that the Endicia brand, mission and people were staying, and the Endicia management team would remain intact. “We will maintain our sharp focus on providing the shipping solutions that meet your needs.”

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Stamps.com acquired ShipWorks ($22 million) and ShipStation ($50 million plus performance-linked shares) last year. Stamps.com CEO Ken McBride had explained the value of those companies in a conference call with investors last month. One advantage he cited was Shipworks’ and ShipStation’s broad integration with marketplaces and shopping carts, making them attractive to higher volume multichannel sellers. Another was their support of multiple carriers (FedEx and UPS).

As far Endicia, all of its top customers are in the high volume shipping area and it collaborates with over 250 integration partners, while nearly all of Stamps.com’s top customers are in the enterprise mailing area. McBride called Endicia a great complement to Stamps.com’s traditional strength in the enterprise and small business mailing segments.

After the acquisition, Stamps.com anticipates it will be able to provide enhanced customer support by combining the complementary expertise of both companies’ customer support organizations. Other expected advantages are reduced vendor costs, elimination of duplicate back end infrastructure, and redeployed resources into new areas.

Khechfe said, “The acquisition will pair Endicia’s technology leadership in shipping and its large national sales team with Stamps.com’s large scale small business customer acquisition. Combined, the companies can enhance innovation and increase domestic and international shipping growth for the benefit of our customers and partners.”

Stamps.com spent approximately $40 million on customer acquisition during 2014, with the majority of that spend going into broad small business marketing programs. Endicia acquires its customers with a large national sales team of more than sixty people and with marketing programs that are expressly targeted at high volume shippers.

“Together, the two companies will be able to more effectively compete with the very large competitors we face today in the mailing and shipping industry,” McBride said.

Stamps.com intends to fund the transaction with at least $50 million of cash on hand and committed financing for $165 million from a group of US banks.

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Ina Steiner

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. Send news tips to ina@ecommercebytes.com.


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