A Canadian ecommerce company with a growing appetite for acquiring niche business-to-consumer ecommerce sites and marketplaces is now targeting opportunities in B2B ecommerce.
Emerge Commerce Ltd., a Toronto public company, has acquired Retail Store Networks Inc., which operates B2B marketplace WholesalePet.com, in a stock and cash deal valued at $25 million.
WholesalePet.com is a B2B ecommerce marketplace connecting more than 8,000 independent retail locations with hundreds of independent pet supplies vendors, It offers more than 1 million SKUs. Founded in 2001, WholesalePet.com has facilitated more than $250 million in gross merchandise sales over the last 20 years, with an average customer tenure of 10 years, Emerge Commerce says.
Emerge Commerce is acquiring WholesalePet.com for $12 million in cash, $2 million in Emerge common shares, $2 million in deferred consideration payable over two years, and a contingent earn-out payment of up to $9 million over 24 months.
“This acquisition marks our first foray into both the sticky B2B ecommerce space, as well as the pet’s vertical, one of the fastest-growing segments in the ecommerce sector,” says Emerge Commerce CEO Ghassan Halazon.
WholesalePet.com uses a network of about 500 suppliers that sell to independent pet stores and related business buyers. The site carries more than 20 categories of pet supplies from food and apparel to training products.
WholesalePet.com generated gross merchandise sales of about $40 million and revenue of $3.7 million for the twelve months ended Sept. 30, says Emerge Commerce.
“With the acquisition of WholesalePet.com, we have procured a profitable market leader in the lucrative B2B pet ecommerce space,” Halazon says. “WholesalePet.com will fit perfectly in the Emerge ecosystem.”
Wholesale.com, which is based in Richmond, Virginia., is the third acquisition by Emerge Commerce in recent months and the company’s seventh acquisition overall. In October, Emerge Commerce completed its acquisition of BattlBox LLC, an outdoor, camping, and survival goods subscription business based in Milledgeville, Georgia, and Carnivore Club LLC, a Toronto online subscription company selling premium artisanal meats.
Emerge Commerce says it paid about $19 million for both companies, including $10.25 million in cash, $1.5 million in deferred consideration payable over 3 years, and a contingent earnout consideration of up to $7.2 million over 36 months.
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