(CNN) — South Korean internet giant Naver is acquiring leading online resale platform Poshmark for $1.2 billion, the companies announced Monday.
Under the terms of the deal, Naver is paying $17.90 a share in an all-cash deal.
Poshmark shares rose 14% in after-hours trading on the news.
Naver, which operates a search engine and ecommerce platform in South Korea, said the deal with Poshmark will help it expand into offering a “socially responsible and sustainable shopping experience designed around sellers of all sizes and interests — from individual and influencer sellers.”
For Poshmark, the deal expands its global reach by helping it enter new and large markets, Poshmark CEO Manish Chandra, said in a statement.
Upon completion of the deal, the companies said Poshmark will become a standalone U.S. subsidiary of Naver. Chandra will remain as its chief executive officer, the companies said.
The resale market, which was already gaining steam going into 2020 because of environmentally conscious Millennial and Gen Z shoppers, saw a pandemic-time boom as quarantined households took to cleaning out their closets and considered reselling clothes that they no longer needed.
Coming out of the pandemic, the space ignited a flurry of M&A activity, including Etsy’s acquisition of Gen Z-focused reseller Depop for $1.63 billion and ThredUp’s acquiring European resale company Remix.
“While the Poshmark-Naver deal is a major one in the world of resale, it is unlikely to be the last,” said Neil Saunders, retail analyst and managing director at GlobalData Retail. “The resale market, which for apparel will be worth $119 billion globally this year, growing to $219 billion by 2026, is in an exciting phase and is still relatively embryonic. This means it is ripe for consolidation and deal making.”