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Australian retail group Woolworths has announced plans to expand its online retail presence by purchasing an 80% stake in online marketplace MyDeal for an enterprise value worth approximately AU$243 million.
Under the deal, Woolworths is offering MyDeal shareholders AU$1.05 per share in cash and for MyDeal to be de-listed from the Australian Securities Exchange.
Meanwhile, MyDeal founder and CEO Sean Senvirtne along with other key management shareholders will retain, approximately, a 20% interest in the business. They will also continue to retain their position following the completion of the deal to “lead the business through its next phase of growth in partnership with Woolworths Group”.
“The addition of MyDeal to Woolworths Group represents a further step towards delivering a more holistic customer experience in food and everyday needs and materially expands our marketplace capabilities, especially in general merchandise,” Woolworths Group CEO Brad Banducci said.
The MyDeal board has unanimously recommended that MyDeal shareholders vote in favour of the transaction, with Senvirtne acknowledging the deal will “support the growth of our retail platform by accessing Woolworths Group’s capabilities across eCommerce, supply chain, retail, loyalty and more”.
During the company’s half-year results, Woolworths reported that e-commerce sales continued to remain a key revenue driver for the group, reporting e-commerce sales jumping 48% year-on-year to AU$3.5 billion for the period.
Woolworths also noted its WooliesX business saw “record visits” to its digital platforms driven by higher app usage. Active weekly app users were up 50% in December versus the prior year, while its Everyday Rewards App reached over one million weekly active users in Q2. By the end of the half, there were 13.3 million registered Everyday Rewards members.
This latest acquisition comes off the back of the company also recently establishing its advanced analytics platform, Q-Retail, in partnership with analytics firm Quantum, where Woolworths holds a majority stake, and that Quantium signed deals with Telstra and Asda.
Following regulatory approval, Woolworths and MyDeal expect the acquisition to be finalised some time before the end of Q4 calendar 2022.
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