Kogan.com has bought out major New Zealand retail site Mighty Ape for $122.4 million AUD cash, in an effort to expand its presence on the other side of the ditch.
Mighty Ape, which has 690,000 unique customers and more than 895,000 subscribers, specialises in gaming, toys, and other entertainment. Its 10,000m2 distribution centre near Auckland (pictured below, image from Mighty Ape) ships to both New Zealand and Australia, with more than 935,000 fast-selling products able to deliver to most Australian metros within two business days.
According to David Shafer, CFO and COO of Kogan.com, the move is a natural fit for Kogan, which will be able to harness Mighty Ape’s years of experience to bolster its presence in New Zealand.
“Mighty Ape will give us significant scale in New Zealand and further strength across a variety of operational dimensions.
“We will be drawing on Mighty Ape’s deep experience in gaming, toys, other entertainment product categories and the New Zealand market, and combining this experience with Kogan.com’s sourcing, technology, systems, infrastructure, and marketplace capabilities, to further enhance the group’s already market-leading offering across the Tasman,” he said.
In the 12 months to September 2020, Mighty Ape brought in revenue of AUD $120.1 million, gross profit of AUD $37.8 million and EBITDA of AUD $9.9 million, according to unaudited management accounts. This is forecast to grow to revenue of AUD $137.7 million, gross profit of AUD $45.7 million, and EBITDA of AUD $14.3 million (pre synergies) in FY2021.
Mighty Ape founder and CEO Simon Barton said that the Kogan acquisition will expand Mighty Ape’s product offering and improve its customer experience.
“I am excited about working with Ruslan and David, and the broader Kogan.com team — who have built an incredible business — while also aligning and creating more growth opportunities for the incredible team that helped build Mighty Ape to be New Zealand’s most trusted retailer brand,” he said.
Kogan last month saw its shares jump 4.8 per cent after its AGM, where shareholders approved controversial bonuses for Shafer and CEO Ruslan Kogan; however, financial services firm Morningstar has warned the retailer’s stock is “significantly overvalued”, with booming sales figures not expected to hold up post-COVID.
