eBay Will Acquire Braintree for $800 Million in Cash

EBay has agreed to acquire Chicago-based Braintree for about $800 million, the companies announced on Thursday morning.

In buying Braintree, eBay has taken one of the major competitors of its payments unit PayPal off the table.

The Wall Street Journal reported earlier this week that the two sides were closing in on a deal.

Braintree provides businesses with a payments gateway — essentially a virtual point-of-sale — a merchant account, and other tools to accept credit card purchases online and on mobile apps. Braintree’s customer set includes Airbnb, OpenTable and Uber, making it an attractive target for PayPal as the eBay-owned company looks to grab business from young, fast-growing companies with mobile-centric businesses.

Braintree also owns Venmo, the maker of an app that lets individuals transfer money to each other. PayPal, of course, also allows for money transfers between PayPal holders. In an interview with AllThingsD, PayPal product chief Hill Ferguson said it’s too early to tell how exactly Venmo will be used at eBay.

Ferguson said Braintree would continue to operate as a separate brand and serve its existing customer set, while getting additional resources from PayPal and eBay to accelerate growth.

All 210 of Braintree’s employees, including CEO Bill Ready, will join eBay as part of the deal, Ferguson said.

The deal is expected to close late in the fourth quarter.