The deal is subject to adjustments with respect to cash, debt, working capital, transaction expenses and the value of equity awards granted in connection with the all-cash transaction.
Reverb, which will operate as a standalone business when the deal closes, was founded in Chicago in 2013 to make buying musical instruments easier and more affordable. Reverb's sellers are individuals, brick and mortar retailers, dealers and high-profile artists. Etsy has grown into a global marketplace for creative goods with 41 million active buyers and $3.9 billion in annual gross merchandise sales in 2018.
Reverb provides sellers a global audience and musicians around the world access to more inventory and rare, highly coveted items, creating a liquid marketplace that fosters a loyal and passionate user base.
"Vibrant, two-sided marketplaces are lightning in a bottle — there are only a handful of them operating at scale — and Reverb is one,” Etsy CEO Josh Silverman said in a statement. “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."
Reverb Founder and CEO David Kalt said in a statement: "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."
Kalt 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.
The deal is expected to close in late third quarter or early fourth quarter of 2019, subject to regulatory review and other customary closing conditions. Etsy plans to provide information on any impact to our previously provided financial guidance following the completion of the transaction.