Stamps.com received the greenlight from the Department of Justice to acquire rival shipping solution Endicia, the company said last week after releasing its third-quarter earnings. It expects to close on the deal on November 18th.
Both companies are well known USPS PC Postage providers that offer solutions to shippers and mailers, including online merchants. The government investigated the proposed merger under the Hart-Scott-Rodino Act, which is set up to determine whether acquiring and acquired firms are competitors, or are related in any other way such that a combination of the two firms might adversely affect competition. The approval came after an extended period of investigation.
Stamps.com had entered into a definitive agreement with Newell Rubbermaid Inc. in March to acquire Endicia, a wholly-owned subsidiary of Newell Rubbermaid, for $215 million in cash. For more information about the regulatory review process and what was at stake, see this May 26th EcommerceBytes article.
In a press release last week, Stamps.com CEO Ken McBride said, “Endicia represents a significant strategic investment in the high volume shipping area, and we are very excited to move forward with this acquisition. High volume and ecommerce shipping are the fastest growing segments of the mailing and shipping industry and this acquisition will allow us to continue to drive our growth in this very important area.”
Stamps.com has in recent years acquired other shipping services, and McBride continued, “Additionally, during the third quarter we continued to see record financial results across all of our customer segments, including continued strong contributions from our ShipStation and ShipWorks subsidiaries.”
Stamps.com expects to fund the $215 million acquisition cost plus related closing costs with $165 million in bank debt from a group of leading US banks and the remainder from its existing cash and investments.
How does it effect online sellers? In March, Endicia cofounder and General Manager Amine Khechfe told customers in a letter that the Endicia brand, mission and people were staying, and the Endicia management team would remain intact.
In its March announcement, Stamps.com said it expected that the two companies would become more effective in competing against Pitney Bowes, eBay, and others.