Pitney Bowes Bids to Buy Borderfree for $450 Million

Israeli-originated e-commerce firm’s stock doubles in value in N.Y. trading.

Bloomberg

Shares of Borderfree, the Israeli-founded e-commerce firm that is traded on the Nasdaq exchange, doubled in value in Tuesday’s trading in New York over a bid by the American firm Pitney Bowes to buy the company for $450 million. In late afternoon trading in New York, Borderfree’s share price was up by 105% for the day.

Borderfree reported the offer from Pitney Bowes, an American provider of shipping, mailing and e-commerce products, on Tuesday, at the same time that it released its first-quarter financial results. Borderfree, which developed an online purchasing system that in part enables online customers outside the United States to see a customized view of American companies’ merchandise in the customers’ own currency, has been traded on the Nasdaq exchange since an initial public offering in March of last year that generated $80 million in capital for the company, at a market value of $490 million. Subsequently, the company’s market cap declined by 66%. The company currently has $72 million in cash on hand.

Borderfree, which is headquartered in New York, has a workforce of 190, including 55 people in Israel who are engaged in research and development. Pitney Bowes, which is worth $4.5 billion, has more than 1.5 million customers in about 100 countries. Pitney Bowes CEO Marc Lautenbach said his company has long-standing work relations with Borderfree and is very familiar with the company.

Borderfree’s primary shareholder is Israel’s Pitango Venture Capital, with about 26% of the company’s shares. It stands to receive $117 million if the purchase goes ahead. Borderfree CEO Michael DeSimone’s remarks certainly reflected an expectation that the sale would go forward, as he spoke of the prospect of the two companies’ joining forces.

Borderfree was founded in 1999 and was known as FiftyOne before the company switched to the current name. Its clients include a number of America’s leading retailing firms.