Grays will be listed under DealsDirect parent company, Mnemon, which successfully completed a backdoor listing with DealsDirect at the start of the year, becoming the first pure-play online retailer on the ASX.
Reverse takeovers occur when a privately held company purchases a company that is listed on the stock exchange.
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The transaction will see Mnemon acquire 100% of Grays via a scrip-for-scrip offer to Grays’ shareholders, according to the company announcement.
Grays shareholders will not be selling down their interests and no new money will be raised in conjunction with the transaction.
The group will be renamed Grays eCommerce Group upon completion of the transaction.
Grays is the parent company of the popular Graysonline auction network, which auctions a range of goods direct from manufacturers including wine, electronics and motor vehicles.
Grays reported a $2.1 million profit after tax in 2012-13, with revenue of $120.4 million, but the new combined company is expected to have sales of around $500 million.
The group will also include online retailers Oo.com.au and TopBuy.
The move will follow a string of reverse takeovers in Australia, including health advice group Fitgenes and global roaming startup ZipTel.
Fairfax reports several of Gray’s ex-executives are aiming to go head to head with the group as they launch of a local offshoot of US liquidation giant Tiger Capital Group.