Award-winning online retailer AussieCommerce will take a significant slice of the New Zealand e-commerce market, thanks to the acquisition of competitor DailyDo Limited.
The Smart50 finalist revealed today it has agreed to pay an undisclosed sum for the DailyDo Group, which owns e-commerce websites DailyDo, Spreets, Yazoom and Groupy. A further earn-out payment will be paid over a 12 month period.
AussieCommerce managing director Adam Schwab told SmartCompany this morning AussieCommerce has been running campaigns in New Zealand for some time through its Luxury Escape and brandsExclusive brands and the DailyDo acquisition will give the group a stronger foothold in the highly competitive NZ market.
“DailyDo is a similar business to our own … it reminds us of how we were a few years ago,” Schwab says.
DailyDo has a membership base of more than 400,000 members, which will boost AussieCommerce’s total membership numbers to six million.
“They built the business from scratch in what is a pretty competitive market,” Schwab says. “It was bootstraps all the way.”
“It’s a profitable business, which is a pretty unusual thing in this business … some of our competitors haven’t been profitable but we’ve always been a bit old school, we focus on growing our bottom line.”
While Schwab was unable to reveal the sale price, he describes the transaction as “reasonable”.
“The vendors were happy and hopefully we’ll be happy with the results,” he says.
The DailyDo sites will continue to operate separately from the rest of the AussieCommerce group, with all 23 Auckland-based staff staying on board.
But Schwab says the acquisition will help AussieCommerce build greater economies of scale across the group and while it is “business as usual” for the time being, “down the track we will see what we can do”.
Schwab isn’t ruling out any further acquisitions for the group, which has grown by 149% since Schwab and business partner Jeremy Same founded the company in 2010. Last year the group turned over $138 million.
“We’re always on the look out,” Schwab says.
“If the right opportunity comes our way, we’ll take a look … we’re open to expanding where there are great revenue synergies and a great match in terms of personality”.
And while there has been market speculation about AussieCommerce pursuing an initial public offering, Schwab says “nothing has really changed at our end”.
“It remains an option, as does other transactions and staying private,” he says.
“As a profitable business, there is no urgency on us. We’re focused on growing value for our stakeholders.”