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Woolworths to Acquire Majority Stake in MyDeal
Woolworths Group has proposed to acquire an 80 percent interest in the Australian online marketplace, MyDeal, with a valuation of $243 million. Sean Senvirtne will retain a 20 percent stake, and remain as CEO of the business.
The online retailer has entered into a binding Scheme Implementation Agreement to acquire approximately 80 percent of the MyDeal business for a cash consideration of $1.05 a share. MyDeal will, as such, be de-listed from the ASX. MyDeal listed on the ASX in October 2020.
As such, this offer implies an enterprise value of $243 million. Woolworths Group is now up against the big guns in the online marketplace field, including Wesfarmers which acquired Catch in 2019 for $250 million, Kogan and Amazon.
CEO and Founder of MyDeal, Sean Senvirtne, plus other Key Management Personnel will retain a ‘significant’ minority hare. Senvirtne and his team will continue to lead the business. Senvirtne will sell his current 60 percent share in MyDeal into the Scheme, with Kate Dockery and Dean Ramler each selling 70 percent of their respective MyDeal shareholdings into the Scheme. Senvirtne will retain an 18.9 percent Sharehlding stake, with Dockery retaining 0.5 percent, and Ramler holding 0.4 percent.
“The transaction is a highly attractive proposition for MyDeal shareholders and represents a significant premium to MyDeal’s share price,” said Senvirtne of the deal. “I am excited to retain a significant and continued interest in MyDeal and to lead the business through its next stage of growth to become Australia’s leading marketplace.”
Senvirtne shared his excitement for the acquisition and future growth plans with help from Woolworths Group. “The MyDeal team is excited by the opportunity to partner with Woolworths Group,” said Senvirtne of the news. “It will help support the growth of our rental platform by accessing Woolworth Group’s capabilities across e-commerce, supply chain, retail, loyalty and more.”
MyDeal will enable further enhancements to Woolworths Group’s marketplace capabilities, specifically within the furniture, homewares and other bulky goods categories. Furthermore, this partnership will complement the current Big W capabilities and current general merchandise offer.
“The addition of MyDeal to Woolworths Group represents a further step towards delivering a more holistic experience in food and everyday needs and materially expands our marketplace capabilities, especially in general merchandise,” said Brad Banducci, the CEO of Woolworths Group.
MyDeal’s shares are currently at $0.64 a share. Its shares have remained stagnant over the last week, despite the industry experiencing ongoing turbulence. Over the last month, its shares have been some of the only stable performers. Its recent quarterly results indicated gross sales of $60.4 million, increasing 35.2 percent on PCP, and surpassing one million active customers.
“The Scheme is an attractive transaction which provides an all-cash option for MyDeal shareholders,” said Paul Greenberg, MyDeal Chairman. “The MyDeal Board concluded that the Scheme represents a compelling outcome for our shareholders, customers, suppliers and staff. The cash consideration of $1.05 per share represents a highly attractive premium to current trading levels and a premium to the IPO price.”
“The price is a very tangible measure of the value and quality of MyDeal’s industry-leading online marketplace platform,” he continued. “At a significant premium to the current trading price, Woolworths Group’s offer provides MyDeal shareholders with certainty of value and the opportunity to realise their investment in full for cash.”
The first court hearing for the transaction will commence in July 2022, with the implementation date expected to take place in Q3/Q4 2022.
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