Maggie Beer Holdings has announced it intends to acquire Hampers & Gifts Australia for $40 million. The ecommerce gourmet hamper business, operating as The Hamper Emporium and Gifts Australia business recorded a FY21 1H revenue of $36.4 million and EBIDTA of $9.07 million.
MBH said it was a strategic fit into its ecommerce and digital transformation. The $40 million price plus earnout would ben an initial price of 50 per cent cash and 50 per cent MBH shares under a two-year escrow issued at $0.35 per share. A $10m million earnout would be subject to HGA businesses achieving a combined $10 million EBITDA in FY23.
MBH CEO Chantale Millard said it was a key strategy of the group to grow its direct-to-customer and ecommerce business and the acquisition would help it do so.
"Partnering with [HGA], which is very profitable and cash generating will help us transform the MBH group and move it to its next level of growth," Millard said.
The funding would be secured through a $30 million capital raise of placement and accelerated non-renounceable entitlement offer, with certain elements subject to shareholder approval.
MBH's ecommerce business grew 167 per cent in H1 FY21 compared to H1 FY20. In its half yearly report the company confirmed ecommerce was now a strategic goal across the business and the recruitment of an ecommerce manager was underway. The company intends to better utilise the 60,000 members of the Maggie Beer Food Club, more than six million viewers of the Cooking with Maggie series, large social media following and website traffic.
In its announcement MBH said it would be relocating its hamper distribution business to the east coast, allowing faster delivery and same day delivery capabilities.
From HGA’s despatch operations in Sydney, HGA CEO Amy McWaters said she was looking forward to making it easier for customers to access Maggie Beer products.
"Having spent time with Chantale and her time, there is a clear alignment in company culture and drive for continued improvement and growth," McWaters said.
It will also develop new hamper products and ranges, utilising its own- and third-party products to create year-round and more occasion-based offers.
HGA founder and creative director Emily McWaters said she would be staying with the business and that there was "significant mutual benefit" across the two businesses.
"Maggie Beer is a premium iconic Australian gourmet brand that will only further enhance our offering of affordable luxury," McWaters said.
The Hamper Emporium sold more than 125,000 hampers in FY20 and is on track to sell more than 250,000 in FY21, MBH said. Gifts Australia sold around 64,000 items in FY20.
MBH said HGA's projected revenue for FY21 was $36.4 million and EBITDA of roughly $9.07 million.
It is expected the combined MBH and HGA business will generate more than $85 million per year.