eBay has announced that it has settled a lawsuit with the co-founders of Skype around its sale of the VoIP service, allowing the deal signed by eBay with several investment firms to sell a majority stake in the company worth US$2 billion to go ahead as planned.
The founders, Niklas Zennstrom and Janus Friis, will take on a 14 percent stake of the company, while eBay will still hold a 30 percent stake. The investment firms will now take a 56 percent stake in the communications company, lower than the original 65 percent stake that was announced previously.
The agreement sees Zennstrom and Friis dropping their lawsuits over intellectual rights over Skype’s core technology, via Joltid and Joost, and will transfer that core technology to the new Skype. The deal also gives them two seats in the board, possibly being filled by the two.
“Skype will be well positioned to move forward under new owners with ownership and control over its core technology,” eBay President and CEO John Donahoe said. “ At the same time, eBay continues to retain a significant stake in Skype and will benefit from its continued growth. We look forward to closing the deal and focusing on growing our core ecommerce and payments businesses.”
“At the same time, eBay continues to retain a significant stake in Skype and will benefit from its continued growth. We look forward to closing the deal and focusing on growing our core ecommerce and payments businesses,” said Managing Director for Silver Lake, which is an investor in the new company, Egon Durban said.
As part of the settlement, the company will give 10 percent to the founders in the new venture, and the founders paid US$83 million for another four percent stake in the company. The deal is expected to close by the end of this year.
It has also been announced that Index Ventures has withdrawn their participation in the new investor group. “Although Skype has the potential to be a great investment, the deal terms changed for Index such that it no longer matches our investment criteria and thus we have decided not to participate in the transaction,” Index partner Danny Rimer said in the statement.
The new deal will value Skype at US$2.75 billion with eBay expected to receive at least US$1.9 billion in cash once it is completed.