PayPal Holdings, Inc. announced that it has agreed to acquire Honey Science Corporation, a rapidly-growing technology platform for shopping and rewards, for approximately $4 billion. Honey, in combination with PayPal’s two-sided network, will transform the shopping experience for PayPal’s consumers while increasing sales and customer engagement for its merchants.
Founded in 2012, Honey is best known as a popular discovery tool that helps consumers find savings as they shop online. Honey has continued to grow and evolve, expanding its suite of products and services to include a mobile shopping assistant, offers and rewards program, and price-tracking tools and alerts. With approximately 17 million monthly active users, Honey has helped millions of people find more than $1 billion in savings in the past year. Honey currently works across approximately 30,000 online retailers ranging from fashion and technology, to travel and pizza delivery.
The acquisition supports PayPal and Honey’s shared mission to simplify and personalize shopping experiences for consumers while driving conversion and increasing consumer engagement and sales for merchants. The combination will help accelerate growth across both companies. Honey will accelerate its growth by driving adoption among PayPal and Venmo’s more than 275 million active consumer accounts and sourcing exclusive offers from PayPal’s extensive network of 24 million merchant accounts. Honey will enable PayPal to reach consumers at the beginning of their shopping journeys and will enhance PayPal’s ability to help merchants acquire and convert consumers by delivering offers that are personalized, timely, and optimized across channels.
“Honey is amongst the most transformative acquisitions in PayPal’s history. It provides a broad portfolio of services to simplify the consumer shopping experience, while at the same time making it more affordable and rewarding,” said Dan Schulman, president and CEO of PayPal. “The combination of Honey’s complementary consumer products with our platform will significantly enhance our ability to drive engagement and play a more meaningful role in the daily lives of our consumers. As a partner of choice for our merchants, this is another way that we can help them build and strengthen their customer relationships, provide personalized offers, and drive incremental sales. The combination of Honey and PayPal adds another significant and meaningful dimension to our two-sided platform.”
Following the acquisition, Honey will retain its headquarters and brand in Los Angeles, California. Honey co-founders George Ruan and Ryan Hudson will continue to lead the Honey team as part of PayPal’s global consumer product and technology organization, reporting to Senior Vice President John Kunze.
“Honey’s vision has always been to give consumers the tools they need to make the best decisions with their money,” said Ruan. “PayPal shares that vision and together we can build powerful commerce capabilities that create real value for both consumers and retailers around the world.”
“Combining PayPal’s assets and reach with our technology, we can build powerful new online shopping experiences for consumers and merchants,” said Hudson. “We’ll have the ability to help millions of retailers efficiently reach consumers with offers that deliver more and more value to Honey members.”
Honey was profitable on a net income basis in 2018. Subject to customary closing conditions, including the receipt of regulatory approvals, the transaction is expected to close in the first quarter of 2020. The acquisition is expected to be accretive to PayPal’s non-GAAP earnings per share in 2021.
Perella Weinberg Partners LP is acting as sole financial adviser to PayPal, and Skadden, Arps, Slate, Meagher & Flom LLP is acting as its legal adviser with regard to the transaction. Qatalyst Partners is acting as sole financial adviser to Honey, while Latham & Watkins, LLP is acting as its legal adviser.
PayPal has remained at the forefront of the digital payment revolution for more than 20 years. By leveraging technology to make financial services and commerce more convenient, affordable, and secure, the PayPal platform is empowering 300 million consumers and merchants in more than 200 markets to join and thrive in the global economy. For more information, visit paypal.com.
Honey Science Corporation is an L.A.-based tech company building tools to help people save time and money when shopping online. What started as a browser extension has grown into a suite of free tools that help everyone shop with confidence. From notifying you when a price drops, to showing you the lowest prices available, Honey provides you with the information that you need to make the best decisions with your money. With approximately 17 million monthly active users, Honey has helped millions of people find more than $1 billion in savings in the past year. Visit www.joinhoney.com to shop smarter.
This announcement contains “forward-looking” statements within the meaning of applicable securities laws. Forward-looking statements and information relate to future events and future performance and reflect PayPal’s expectations regarding the impact of this transaction on PayPal’s and Honey’s financial and operating results and business, the operation and management of Honey after the acquisition, and the timing of the closing of the acquisition. Forward-looking statements may be identified by words such as “seek”, “believe”, “plan”, “estimate”, “anticipate”, expect”, “project, “forecast”, or “intend”, and statements that an event or result “may”, “will”, “should”, “could”, or “might” occur or be achieved and any other similar expressions.
Forward-looking statements involve risks and uncertainties which may cause actual results to differ materially from the statements made, and, accordingly, readers should not place undue reliance on forward-looking statements and information. Factors that could cause or contribute to such differences include, but are not limited to, the timing and possible outcome of security holder and regulatory approvals in connection with the transaction, the possibility that the transaction may not close, the reaction to the transaction of Honey’s customers and business partners, the reaction of competitors to the transaction, the retention of Honey’s employees, PayPal’s plans for Honey, economic and political conditions in the global markets in which PayPal and Honey operate, the future growth of PayPal’s and Honey’s businesses and the possibility that integration following the transaction may be more difficult than expected.
More information about these and other factors that could adversely affect PayPal’s results of operations, financial condition and prospects or that could cause actual results to differ materially from those expressed or implied in forward-looking statements can be found in PayPal Holdings, Inc.’s most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other filings with the Securities and Exchange Commission (the “SEC”), and its future filings with the SEC.
The forward-looking statements contained in this announcement speak only as of the date hereof. PayPal expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in the expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.
IRS, Treasury Department and Department of Labor Give Guidance on Small Business Leave and Tax Credit
The U.S. Treasury Department, Internal Revenue Service (IRS) and the U.S. Department of Labor (Labor) have announced that small and midsize employers can begin taking advantage of two new refundable payroll tax credits, designed to immediately and fully reimburse them, dollar-for-dollar, for the cost of providing Coronavirus-related leave to their employees.
This relief to employees and small and midsize businesses is provided under the Families First Coronavirus Response Act (Act), signed by President Trump on March 18, 2020.
The Act will help the United States combat and defeat COVID-19 by giving all American businesses with fewer than 500 employees funds to provide employees with paid leave, either for the employee’s own health needs or to care for family members.
The legislation will enable employers to keep their workers on their payrolls, while at the same time ensuring that workers are not forced to choose between their paychecks and the public health measures needed to combat the virus.
* Paid Sick Leave for Workers
* For COVID-19 related reasons, employees receive up to 80 hours of paid sick leave and expanded paid child care leave when employees’ children’s schools are closed or child care providers are unavailable.
* Complete Coverage
* Employers receive 100% reimbursement for paid leave pursuant to the Act.
* Health insurance costs are also included in the credit.
* Employers face no payroll tax liability.
* Self-employed individuals receive an equivalent credit.
* Fast Funds
* Reimbursement will be quick and easy to obtain.
* An immediate dollar-for-dollar tax offset against payroll taxes will be provided
* Where a refund is owed, the IRS will send the refund as quickly as possible.
* Small Business Protection
* Employers with fewer than 50 employees are eligible for an exemption from the requirements to provide leave to care for a child whose school is closed, or child care is unavailable in cases where the viability of the business is threatened.
* Easing Compliance
* Requirements subject to 30-day non-enforcement period for good faith compliance efforts.
To take immediate advantage of the paid leave credits, businesses can retain and access funds that they would otherwise pay to the IRS in payroll taxes. If those amounts are not sufficient to cover the cost of paid leave, employers can seek an expedited advance from the IRS by submitting a streamlined claim form that will be released next week.
The Act provided paid sick leave and expanded family and medical leave for COVID-19 related reasons and created the refundable paid sick leave credit and the paid child care leave credit for eligible employers. Eligible employers are businesses and tax-exempt organizations with fewer than 500 employees that are required to provide emergency paid sick leave and emergency paid family and medical leave under the Act. Eligible employers will be able to claim these credits based on qualifying leave they provide between the effective date and December 31, 2020. Equivalent credits are available to self-employed individuals based on similar circumstances.
The Act provides that employees of eligible employers can receive two weeks (up to 80 hours) of paid sick leave at 100% of the employee’s pay where the employee is unable to work because the employee is quarantined, and/or experiencing COVID-19 symptoms, and seeking a medical diagnosis. An employee who is unable to work because of a need to care for an individual subject to quarantine, to care for a child whose school is closed or child care provider is unavailable for reasons related to COVID-19, and/or the employee is experiencing substantially similar conditions as specified by the U.S. Department of Health and Human Services can receive two weeks (up to 80 hours) of paid sick leave at 2/3 the employee’s pay. An employee who is unable to work due to a need to care for a child whose school is closed, or child care provider is unavailable for reasons related to COVID-19, may in some instances receive up to an additional ten weeks of expanded paid family and medical leave at 2/3 the employee’s pay.
Paid Sick Leave Credit
For an employee who is unable to work because of Coronavirus quarantine or self-quarantine or has Coronavirus symptoms and is seeking a medical diagnosis, eligible employers may receive a refundable sick leave credit for sick leave at the employee’s regular rate of pay, up to $511 per day and $5,110 in the aggregate, for a total of 10 days. For an employee who is caring for someone with Coronavirus, or is caring for a child because the child’s school or child care facility is closed, or the child care provider is unavailable due to the Coronavirus, eligible employers may claim a credit for two-thirds of the employee’s regular rate of pay, up to $200 per day and $2,000 in the aggregate, for up to 10 days. Eligible employers are entitled to an additional tax credit determined based on costs to maintain health insurance coverage for the eligible employee during the leave period.
Child Care Leave Credit
In addition to the sick leave credit, for an employee who is unable to work because of a need to care for a child whose school or child care facility is closed or whose child care provider is unavailable due to the Coronavirus, eligible employers may receive a refundable child care leave credit. This credit is equal to two-thirds of the employee’s regular pay, capped at $200 per day or $10,000 in the aggregate. Up to 10 weeks of qualifying leave can be counted towards the child care leave credit. Eligible employers are entitled to an additional tax credit determined based on costs to maintain health insurance coverage for the eligible employee during the leave period.
Prompt Payment for the Cost of Providing Leave
When employers pay their employees, they are required to withhold from their employees’ paychecks federal income taxes and the employees’ share of Social Security and Medicare taxes. The employers then are required to deposit these federal taxes, along with their share of Social Security and Medicare taxes, with the IRS and file quarterly payroll tax returns (Form 941 series) with the IRS.
Under guidance that will be released next week, eligible employers who pay qualifying sick or child care leave will be able to retain an amount of the payroll taxes equal to the amount of qualifying sick and child care leave that they paid, rather than deposit them with the IRS.
The payroll taxes that are available for retention include withheld federal income taxes, the employee share of Social Security and Medicare taxes, and the employer share of Social Security and Medicare taxes with respect to all employees.
If there are not sufficient payroll taxes to cover the cost of qualified sick and child care leave paid, employers will be able file a request for an accelerated payment from the IRS. The IRS expects to process these requests in two weeks or less. The details of this new, expedited procedure will be announced next week.
If an eligible employer paid $5,000 in sick leave and is otherwise required to deposit $8,000 in payroll taxes, including taxes withheld from all its employees, the employer could use up to $5,000 of the $8,000 of taxes it was going to deposit for making qualified leave payments. The employer would only be required under the law to deposit the remaining $3,000 on its next regular deposit date.
If an eligible employer paid $10,000 in sick leave and was required to deposit $8,000 in taxes, the employer could use the entire $8,000 of taxes in order to make qualified leave payments and file a request for an accelerated credit for the remaining $2,000.
Equivalent child care leave and sick leave credit amounts are available to self-employed individuals under similar circumstances. These credits will be claimed on their income tax return and will reduce estimated tax payments.
Small Business Exemption
Small businesses with fewer than 50 employees will be eligible for an exemption from the leave requirements relating to school closings or child care unavailability where the requirements would jeopardize the ability of the business to continue. The exemption will be available on the basis of simple and clear criteria that make it available in circumstances involving jeopardy to the viability of an employer’s business as a going concern. Labor will provide emergency guidance and rulemaking to clearly articulate this standard.
Labor will be issuing a temporary non-enforcement policy that provides a period of time for employers to come into compliance with the Act. Under this policy, Labor will not bring an enforcement action against any employer for violations of the Act so long as the employer has acted reasonably and in good faith to comply with the Act. Labor will instead focus on compliance assistance during the 30-day period.
For More Information
For more information about these credits and other relief, visit Coronavirus Tax Relief on IRS.gov. Information regarding the process to receive an advance payment of the credit will be posted next week.
Stocks Soar During Historic Day For The Dow
Stocks soared yesterday on news that the $2 trillion stimulus bill was “on the five yard line” and close to be finalized by both the Democrats and Republicans.
The stimulus package will provide relief for companies that have been caught up in the economic fallout from the coronavirus outbreak.
Delays in the bill’s passage were due to the Democrat’s concerns that the bill favored Wall Street over Main Street.
House Speaker Nancy Pelosi appeared on CNBC and told Jim Cramer that there is “real optimism” of a stimulus deal being reached. “We think the bill has moved sufficiently to the side of workers,” she said.
After news broke of the deal nearing completion, stocks went on to stage a historic rally that lifted all three major indexes.
The Dow Jones Industrial Average climbed 11.37%, or 2,112 points, for its biggest one-day percentage gain since 1933 and its largest point gain ever. The S&P 500 rallied 9.38% for its best day since October 2008 and the Nasdaq climbed 8.12%.
With the stimulus bill close to passing and the markets staging a historic rally, some were willing to look ahead and predict the end of the bear market.
Michael Novogratz, CEO of Galaxy Digital, was on CNBC’s Squawk Box and said “From a market perspective… it feels like we’re coming to the end of it,” and said he started buying again on Monday.
Far more investors, however, view yesterday’s rally as nothing more than a one-day rebound.
“This was a one-day bull market,” CNBC’s Jim Cramer said on “Closing Bell” on Tuesday. “You had stocks that moved so much they basically moved as if the second half of the year is going to be good. I struggle to find out why the second half of the year should be good …I hate this kind of rally. This was a machine driven rally, just like the sell-offs … I want to wait to see.”
Nikolaos Panigirtzoglou, a managing director at JPMorgan, said the rally could be partly due to short sellers covering their positions to grab profits. He said there could be “considerable short covering from here,” which would temporarily lift equity prices.
Others believe it may be nothing more than a simple bounce due to so many stocks being oversold.
Sam Stovall, chief investment officer at CFRA Research said “Even in bear markets, you can end up being oversold, and I think that this market was stretched like a rubber band that, at least in the near term, was ready to snap back.”
That “snap back” rally is adding to the market volatility. Last week, the index climbed to 82.69, beating the highest reading during the 2008 financial crisis. The volatility index (VIX) did drop yesterday 1.2%, to 60.85.
What remains to be seen is if the rally can last for more than a single day, and if buyers will continue showing up before the coronavirus is contained. Many believe that the rally is nothing more than optimism surrounding the stimulus plan, and that a lasting rebound in the markets won’t happen until there’s clear evidence that the coronavirus has slowed.
HHS Funds Phase 2/3 Clinical Trial for Potential Treatment for COVID-19
An antibody medicine being evaluated to treat severe cases of coronavirus disease 2019 (COVID-19) will receive additional support from the U.S. Department of Health and Human Services’ Office of the Assistant Secretary for Preparedness and Response (ASPR) under an existing partnership with Regeneron Pharmaceuticals of Tarrytown, New York.
The Biomedical Advanced Research and Development Authority (BARDA) within ASPR will provide support for a U.S. Phase 2/3 clinical trial to evaluate Kevzara as a potential treatment for severely ill COVID-19 patients. Currently, Kevzara is approved by the U.S. Food and Drug Administration for the treatment of rheumatoid arthritis. Kevzara was developed under a collaboration between Regeneron and Sanofi; the companies continue to collaborate on studying Kevzara for COVID-19, with Regeneron leading U.S.-based trials and Sanofi leading trials outside the U.S.
‘We are working at a record pace with our private sector partners to speed development of therapeutic treatments for people with COVID-19,’ said BARDA Director Rick A. Bright, PhD. ‘By repurposing a currently approved product, we may be able to expedite development and make treatments available quickly.’
Patients with COVID-19 are at risk of developing life-threatening respiratory failure, which may be mediated in part by elevated levels of a series of pro-inflammatory molecules, including interleukin-6 (IL-6). Kevzara is a fully-human monoclonal antibody that binds to the IL-6 receptor on normal cells and may improve patient outcomes by decreasing the severe inflammatory response.
The role of IL-6 is supported by preliminary uncontrolled data from a Chinese trial of a different IL-6 agent, which showed rapid reductions in fever in all patients and improvements in oxygenation. The Phase 2/3 clinical trial will determine if Kevzara can be used as a safe and effective therapy to reduce the amount of time that a person infected with the novel coronavirus remains ill. The first part of the trial will evaluate the impact of Kevzara on fever and patients’ need for supplemental oxygen. The second, larger part of the trial will evaluate the improvement in longer-term outcomes, including whether it can prevent death and reduce the need for mechanical ventilation, supplemental oxygen, and/or hospitalization.
This partnership with Regeneron is among the first to be issued by BARDA with funding from the H.R.6074 – Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020 that was passed by the U.S. Congress and signed by President Trump on March 6, 2020.
HHS continues to work across the U.S. government, including with the Department of Defense, to review potential products from public and private sectors to identify promising candidates that could detect, protect against, or treat COVID-19 for development and FDA approval/clearance.
In addition to this adaptive Phase 2/3 clinical trial with Kevzara, one other HHS-funded trial of an investigational COVID-19 treatment is ongoing. The National Institute of Allergy and Infectious Diseases (NIAID), part of the National Institutes of Health (NIH), is sponsoring a randomized controlled clinical trial to evaluate the safety and efficacy of the investigational antiviral remdesivir in hospitalized adults.
‘Proven treatment options for COVID-19 are urgently needed. This trial of Kevzara is critical to inform doctors on treatment options for COVID-19,’ said HHS Secretary Alex Azar. ‘The close collaboration between BARDA, the FDA, and Regeneron to initiate this trial as soon as possible again demonstrates the speed at which we are responding to this pandemic.’
HHS divisions, including NIH and ASPR, are supporting the development of multiple diagnostic tests, vaccines, and potential therapeutic treatments for COVID-19. BARDA continues to seek partners for COVID-19 medical countermeasures, and offers multiple ways to submit proposals for potential new products or technologies.
About HHS, ASPR, and BARDA
HHS works to enhance and protect the health and well-being of all Americans, providing for effective health and human services and fostering advances in medicine, public health, and social services. The mission of ASPR is to save lives and protect Americans from 21st century health security threats. Within ASPR, BARDA invests in the innovation, advanced research and development, acquisition, and manufacturing of medical countermeasures – vaccines, drugs, therapeutics, diagnostic tools, and non-pharmaceutical products needed to combat health security threats. To date, 54 BARDA-supported products have achieved regulatory approval, licensure or clearance.
IRS, Treasury Department and Department of Labor Give Guidance on Small Business Leave and Tax Credit
US Consumer Spending Up Modest 0.2% in February
Stocks Close Higher Again, Cap Best 3-Day Run Since 1931
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