14 DAY TRIAL // Amazon has announced it is buying shoe and apparel online retailer Zappos for 10 million Amazon shares. The company valued the shares at $807 million but the closing price for Amazon share was at $88.79 today putting the deal at more than $880 million. Zappos employees will also get $40 million in cash and restricted stock. After the deal Amazon will become the only shareholder at the online retail company.
“Zappos is a customer focused company,” Jeff Bezos, founder and CEO of Amazon.com, said. “We see great opportunities for both companies to learn from each other and create even better experiences for our customers.”
The deal looks pretty good for all parties involved and especially pleased must be the investors, with venture capital firms Sequoia Capital and Venture Frogs leading the pack. Zappatos was funded in seven rounds with a total of $60 million so the return for the investors is considerable especially in a time where most venture capital funds are struggling.
Amazon is also pleased with the deal, getting its hands on a very popular and successful company with a very different philosophy from the online retail giant. With the acquisition, the company strengthens its position as leader in the online retail business, entering a market it had no presence in before. Zappos is also getting a sweet deal as the company will continue to be run as an independent entity, something that CEO Tony Hsieh was particularly keen on, and will be able to continue to build up its business with little intervention.
“We are joining forces with Amazon because there is a huge opportunity to utilize each other’s strengths and move even faster towards our vision of delivering happiness to customers, employees and vendors,” said Tony Hsieh, CEO of Zappos. “We will continue to build the Zappos brand and culture in our own unique way, and we believe Amazon is the best partner to help us do this over the long term.”