By Dhirendra Tripathi
Investing.com – Etsy (NASDAQ:ETSY) jumped more than 6% during Monday’s trading after the company unveiled a deal to buy Brazil’s Elo7 for $217 million in cash.
Elo7 is a marketplace for handmade and unique items and includes items from over 40 retail categories such as wedding, baby, home decor, and children's parties.
In the near term, Elo7's current run rate for revenue and gross merchandise sales is expected to be neutral to Etsy's top-line results and modestly dilutive to adjusted EBITDA margin.
The transaction is currently expected to close during the third quarter of 2021, Etsy said in a note.
Considered a leader in "custom and made-to-order" merchandise in Brazil with strong local brand awareness, the Elo7 marketplace connects approximately 1.9 million active buyers with approximately 56,000 active sellers and currently has approximately 8 million items for sale.
This is Etsy’s second acquisition this month, the first being of Gen Z-focused Depop for $1.625 billion. All the marketplaces will operate independently, according to the Etsy note.