David Kalt

JULY 22, 2019 I REVERB I ACQUISITION
Etsy to Purchase Reverb

Etsy, the global marketplace for creative goods, has signed an agreement to acquire Reverb for $275 million in cash, subject to certain adjustments with respect to cash, debt, working capital, transaction expenses and the value of equity awards granted in connection with the transaction. Reverb will operate as a standalone business once the deal closes.

"Vibrant two-sided marketplaces are lightning in a bottle," said Josh Silverman, Etsy CEO, in a statement. "There are only a handful of them operating at scale, and Reverb is one. This transaction is a great strategic fit that firmly aligns with our mission of keeping commerce human. Reverb is the 'Etsy' of musical instruments, with significant competitive advantages, and we see tremendous value and untapped potential in the business.

"There are a number of similarities between the levers of growth for Etsy and Reverb, such as improving search and discovery, making selling and buying easier, and building a global brand and user community," Silverman continued. "We have been successfully implementing these types of initiatives at Etsy for two years now, and are confident that we can similarly impact Reverb's business. We look forward to welcoming Reverb's talented employees to the Etsy family as we work to better serve our buyers and sellers and drive value for our stakeholders."

David Kalt, Reverb's founder and CEO, said, "In a short amount of time, we've built a community that musicians from all walks of life turn to for income to support their families, inspiration to fuel their passions, instruments to create new music and so much more. We're excited to continue growing our marketplace, team and community as part of Etsy. We've always found inspiration in Etsy. In fact, the company gave me the confidence to launch Reverb when I saw the need for a musician's marketplace in 2013. We're excited to align ourselves with a marketplace that has been supporting artists, makers and creative entrepreneurs for nearly 15 years. Together, we'll continue to create a destination online where the music industry connects over the perfect piece of gear."

In a company statement, Kalt said he has decided this is the right time for him to make a transition, and will continue to serve as CEO until Etsy identifies a new leader of the business. He will remain closely involved to provide leadership and support following the closing.

Rachel Glaser, Etsy's CFO, commented, "As we have said, our M&A strategy looks to put our capital to work in an opportunistic way — finding great businesses at the right value — and we believe Reverb is just that. Reverb shares our mission, has a nearly identical business model, a strong brand in a large, fragmented market and healthy growth dynamics. We plan to run Reverb as a standalone business, sharing knowledge and best practices across key marketplace growth areas such as marketing, seller services and international."

The transaction is currently expected to close in late third quarter or early fourth quarter of 2019, subject to Hart-Scott-Rodino review and other customary closing conditions. Etsy plans to provide information on any impact to Reverb's previously provided financial guidance following the completion of the transaction.

reverb.com