8-KMaterial Agreements

MERCADOLIBRE INC 8-K Report, Material Agreement (Jan 3, 2008)

Filed January 3, 2008For Securities:MELI

Summary

MercadoLibre, Inc. (MELI) announced on January 3, 2008, its entry into a Material Definitive Agreement to acquire 100% of the issued and outstanding shares of CMG Classified Media Group, Inc. and its subsidiaries. This strategic acquisition, valued at $19 million subject to adjustments and escrows, significantly expands MercadoLibre's reach into the online classified advertisements market, specifically focusing on automotive sales (tucarro.com) and real estate (tuinmueble.com) across various Latin American countries and additional territories. The acquisition is expected to bolster MercadoLibre's position in key growth markets by integrating popular classified platforms. The agreement includes customary representations, warranties, and covenants, along with non-compete agreements from management shareholders and sellers. The transaction is contingent upon standard closing conditions, and a break-up fee of $2 million is stipulated for specific termination scenarios.

Key Highlights

  • 1MercadoLibre, Inc. entered into a Stock Purchase Agreement on December 27, 2007, to acquire CMG Classified Media Group, Inc. and its subsidiaries.
  • 2The acquisition targets CMG's online classified advertisements platform, focusing on automotive (tucarro.com) and real estate (tuinmueble.com) listings.
  • 3The transaction expands MercadoLibre's presence in Colombia, Venezuela, Puerto Rico, Panama, the United States, and the Canary Islands.
  • 4The purchase price for the acquisition is $19 million, subject to certain escrows and working capital adjustments.
  • 5The agreement includes standard representations, warranties, and covenants between the buyer and sellers.
  • 6Non-compete agreements are required from management shareholders and sellers at the closing of the transaction.
  • 7A break-up fee of $2 million is payable by either party under specific termination conditions, serving as the sole remedy.

Frequently Asked Questions

The acquisition of CMG Classified Media Group, Inc. is intended to expand MercadoLibre's online classified advertisements business, particularly in the automotive and real estate sectors, thereby strengthening its market presence in key Latin American countries and other territories.

The agreed-upon purchase price for the acquisition is $19 million. However, this amount is subject to potential adjustments based on working capital and will be subject to certain escrows.

MercadoLibre is acquiring 100% of the issued and outstanding shares of CMG and its subsidiaries. These entities operate popular online classified platforms such as tucarro.com (automobiles) and tuinmueble.com (real estate) in various countries.

Yes, the transaction is subject to several closing conditions. These include the continued accuracy of the sellers' representations and warranties made in the purchase agreement, and other standard conditions for such transactions. MercadoLibre cannot guarantee the completion of the transaction on the agreed terms or at all.