Noni B Limited and Alceon Group have announced they have reached an agreement for Noni B to acquire 50.1% equity interest in EziBuy.
Noni B will have economic ownership of the catalogue retailer from 28 October 2019 and will have the option to acquire the remaining 49.9% equity interest on or prior to 31 December 2020 for a consideration of $11 million in cash.
The acquisition forms part of Noni B's digital strategy and will increase online sales to approximately $200 million, representing 20% of total group revenue.
The deal will also allow Noni B access to EziBuy's database of over two million loyal customers, with a significant amount of those based in New Zealand.
Noni B MD and CEO Scott Evans said that the acquisition will fast-track the business' digital strategy and expansion.
"This will be another exciting step forward for the Group, consolidating our position as one of Australia’s leading apparel retailers.
"It will provide a low-risk opportunity to fast-track our digital strategy, increasing our digital income to c. 20% of the combined Group’s revenue.
"The terms of the transaction are very attractive for our Group and we are confident it will be highly value accretive to Noni B.
"We have a successful record of acquiring retail businesses and improving their operational performance.
"It is complementary to our existing portfolio of brands, offering cross-selling opportunities, new category growth and geographical expansion for both businesses.
"EziBuy is one of the largest multi-channel retailers in Australia and New Zealand, generating approximately NZ$135m of revenue, of which over 80% is through its digital platform.
"It houses expertise in digital and catalogue retailing which we can leverage in a meaningful way across our broader portfolio.
"We are excited about the potential growth offered by the EziBuy acquisition and look forward to continued revenue and earnings growth in FY2021 and beyond," he said.
EziBuy delivered normalised EBITDA (excluding non-recurring costs) of NZ$0.4m for FY2019.
Management anticipates cost of doing business synergies of approximately $9 million to be fully realised in FY21, with additional upside anticipated from leveraging Noni B’s sourcing scale and capabilities.
The deal is still subject to shareholder approval, but if approved Noni B will assume day-to-day management of EziBuy.