Amazon earlier this morning announced the official closing of the acquisition of Zappos, a deal which we broke the news about back in July. Turns out the valuation of the online footwear and clothing retailer went up from the reported $928 million over the past few months too – thank you, stock market – and Zappos turns out to have been deemed worth a solid $1.2 billion by Jeff Bezos & co based on Friday’s closing price of $117.4 a share.
Zappos CEO Tony Hsieh writes in a public letter:
We’ve been spending the past few months obtaining all the proper government approvals, and I’m happy to say that we officially closed the deal at the split second between Halloween (10/31/09) and All Saints’ Day (11/1/09). From a practical point of view, we’ve switched out our previous board of directors with a new management committee that is composed of people from Zappos as well as Amazon.
Our investors and other shareholders exchanged their Zappos.com shares for approximately 10 million Amazon.com shares. Given the closing price on Friday, 10/30/09, for Amazon stock, those shares were valued at approximately $1.2 billion at the time of close.
As expected, the Zappos management team will remain intact and the company will continue to operate as a wholly-owned subsidiary with headquarters in Las Vegas, NV.
I’ve embedded a chart showing Amazon’s stock price evolution since the announcement of the acquisition was first made at the end of July up until now. The significant jump noticeable on the right is from when the company announced solid third-quarter earnings.
It made an estimated $272 million difference for Zappos this weekend.
And how was your Halloween?
(Via @Zappos)
Two great companies. Two huge sets of excited shareholders. Great purchase all around.
Already cashed out some Amazon stock, but wish I had more to buy @ $39/share couple months back ….the life of a bootstrapper….
Classic case of overnight success 10 years in the making.
Congrats!
Any estimate one Zappos’ revenue before the purchase?
Tony Hsieh is evidently a good leader, and the little I’ve seen of him seems to suggest he’s a good guy, too.
Congrats on the acquisition and, you know, the extra “pocket change”, too.
Yet Zappos is still losing money….
@Zappos with that extra $272 million maybe you guys can want to buy a company or two. My I present to you http://www.hoodiepeople.com?
I have no idea how Zappos was valued at $1.2 Billion. Doesn’t make any sense when their net revenue was around $15 mil.
Congratz Tony & Alfred on the M&A! I’ve heard that you guys give awesome tours in your Henderson, NV HQ office and employee moral & satisfaction are top priorities @Zappos.
A billion for a superior customer service culture?
A very good company. Love their shoes and their customer service
yeah!