Following a week of swirling rumors, news of Braintree’s sale was confirmed this morning, with eBay announcing it would buy the Chicago-based payments processing company for about $800 million in cash. Braintree will remain an independent service operating within PayPal, which eBay acquired in 2002. The deal is expected to close in the fourth quarter of 2013.
“Braintree is a perfect fit with PayPal,” said eBay Inc. President and CEO John Donahoe in a statement. “[CEO] Bill Ready and his team add complementary talent and technology that we believe will help accelerate PayPal’s global leadership in mobile payments. Together, we expect that PayPal and Braintree also will accelerate our leadership in supporting developers who are creating innovative solutions for next generation commerce startups.”
According to some reports, Braintree’s recent explosive growth was posing an increasing threat to PayPal’s own payment services. As such, eBay’s purchase of the company may have been defensive on some level. On its own, PayPal is projected to reach $20 billion in mobile payments processing this year, while Braintree announced this summer that it would be processing $10 billion annually.
“Given today’s announcement that Braintree will join PayPal, what’s changed?” Ready wrote in a blog post today. “Nothing. And everything.”
Day-to-day operations at Braintree should stay the same, with its office remaining in Chicago and Venmo, which Braintree acquired in August 2012, staying in New York City. Ready will continue as CEO, reporting to PayPal President David Marcus, and the rest of the management team and employees will be staying on as well.
Braintree handles payments processing for a number of notable companies including Uber, OpenTable, TaskRabbit and Rovio.
“The alignment with PayPal means Braintree can continue to push the boundaries of innovation while expanding into new markets with increased speed and confidence,” said Ready in a statement. “Our current customers and developer community can expect the same level of support and partnership they’ve always enjoyed, coupled with more resources.”