Ruslan Kogan (Kogan)
Australian publicly-listed online electronics retail player Kogan.com has ramped up its New Zealand presence after purchasing Auckland-based online retailer Mighty Ape for A$122.4 million.
The transaction will be paid over four tranches and will be subject to variation under an earn out through to delivery of FY23 results.
Mighty Ape was founded in 2008 and focuses on gaming, toys and entertainment categories. Mighty Ape founder Simon Barton and the executive team are expected to stay on until at least FY23.
Mighty Ape employs around 160 staff and has a purpose-built distribution centre just outside of Auckland, which allows the online retailer to offer same-day delivery services in areas such as Auckland, Hamilton, Wellington and Christchurch. The facility also services the Australian market.
Based on unaudited management accounts for the past 12 months, Mighty Ape generated revenue of A$120.1 million with an earnings before tax of A$9.9 million.
According to Kogan.com the acquisition will bring across 690,000 unique customers and more than 895,000 subscribers.
Barton said the combination with Kogan.com will expand its products range and improve its customer experience and infrastructure.
“We are a natural home for Mighty Ape, given similar histories and shared values — most importantly our obsession with delighting customers, and continually improving the online shopping experience,” Kogan.com CFO David Shafer added. "Mighty Ape has more than a decade of experience and track record of delighting Kiwi customers, and has become one of New Zealand’s most trusted brands.
“We will be drawing on Mighty Ape’s deep experience in gaming, toys, other entertainment product categories and the New Zealand market, and combining this experience with Kogan.com’s sourcing, technology, systems, infrastructure, and marketplace capabilities, to further enhance the group’s already market-leading offering across the Tasman.”
In August, Kogan.com founder, Ruslan Kogan signalled a new era for the world of retail as his company emerged from a turbulent FY20 with substantial increases in sales, revenue and profit.
The company reported gross sales for the year of $768.9 million, up 39.3 per cent on the prior year, and revenue of $497.9 million, up 13.5 per cent, compared to FY19. Gross profit, meanwhile, was $126.5 million, up 39.6 per cent on the previous year, which reflected an increase in gross margin of 4.7pp to 25.4 per cent.
