Sold for $36m less than two years ago, bought for $2m yesterday: Aussie Commerce founder tells how he snapped up brandsExclusive
Wednesday, February 12, 2014/
Smart50 finalist Aussie Commerce has bought online shopping club brandsExclusive from APN News & Media for $2 million plus giving APN an 8% equity share in Aussie Commerce.
APN acquired brandsExclusive just 18 months ago paying $36 million but Aussie Commerce founder Adam Schwab told SmartCompany the $2 million price tag is no bargain.
“It was a competitive process,” Schwab says. “I don’t think you get bargains when there are 30 or 40 other potential acquirers looking at the business as well.”
APN chief executive Michael Miller told The Australian APN had “overpaid” for brandsExclusive under his predecessor.
SmartCompany understands APN’s former chief executive and members of the board left as a result of the fallout from the disastrous brandsExclusive acquisition.
Schwab believes Aussie Commerce can turn the online shopping club around.
“It wasn’t a slash and burn acquisition it’s an acquisition to grow the group and cross-sell across the platforms,” Schwab says.
“We think it’s a good buy but you never know until 6 to 12 months afterwards.”
Aussie Commerce achieved sales of $63 million for the six months ending 31 December 2013, up from $18 million over the same period in 2012 and ranked ninth in SmartCompany’s 2013 Smart50.
“We have got a pretty good record of acquiring businesses and bringing them to the group and turning to profitability quite quickly,” Schwab says.
“That’s what we did with The Home, which was haemorrhaging money and now it’s quite profitable.”
Schwab says there is “a lot of work to be done” in integrating brandsExclusive into Aussie Commerce.
“In any acquisition you’ve got two different teams and cultures you have technology issues and people issues. We want to make sure the team of brandsExclusive feel welcome and we can extract revenue synergies along the way,” he says.
He says Aussie Commerce doesn’t have any more acquisitions on the horizon, but is open to them.
“Acquisitions have almost fallen in our lap or are good timing for the target or for us, we’ve probably been the most acquisitive e-commerce business in the country but it hasn’t been intentional,” Schwab says.
“For a target we’re a good partner to have as we buy businesses to build them up. That’s nice for them to know.”
Miller said in a statement to the Australian Securities Exchange that the divestment of brandsExclusive was part of APN’s strategy to consolidate its structure and allow greater focus on its core media and digital businesses.
“The Aussie Commerce management team has a strong record in integrating and growing online businesses. Aussie Commerce also provides the necessary scale for brandsExclusive to prosper in the increasingly competitive online retail environment.”
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