Noni B Limited has reached an agreement to acquire a 50.1 per cent stake in EziBuy Limited from Alceon Group with an option to acquire the remaining 49.9 per cent on or before December 31, 2020 for $11 million.
The deal, announced on Thursday, will double Noni B’s online sales, from less than 10 per cent of total sales in FY19 to approximately 20 per cent, or $200 million, of the group’s total revenue.
It also provides the company, which owns women’s fashion chains Noni B, Rockmans, BeMe, W. Lane, Table Eight, Katies, Millers, Rivers and Autograph, with access to a database of more than two million customers, many of them in New Zealand.
Scott Evans, Noni B’s managing director and CEO, said the acquisition offers a low-risk way to fast-track Noni B’s digital strategy.
“The terms of the transaction are very attractive for our group and we are confident it will be highly value accretive to [Noni B Limited],” he said in a statement.
EziBuy is one of the largest multi-channel retailers in Australia and New Zealand, generating approximately NZ$135 million of revenue, of which over 80 per cent is through its digital platform.
It also has expertise in digital and catalogue retailing, which Noni B plans to leverage across its broader portfolio, according to Evans.
“It is complementary to our existing portfolio of brands, offering cross-selling opportunities, new category growth and geographical expansion for both businesses,” he said.
The deal is expected to save the businesses $9 million when cost of doing business synergies are fully realised in FY21, with additional upside anticipated from leveraging Noni B’s sourcing scale and capabilities.
The deal was approved by an independent sub-committee of the Noni B Limited board, comprising Sue Morphet, Jackie Frank and Scott Evans. Richard Facioni and David Wilshire of Alceon Group, which also owns a stake in Noni B, did not participate in the consideration of the transaction.
Shareholders will vote on the deal at an extraordinary general meeting on December 23, 2019. If approved, Noni B will assume day-to-day management of EziBuy.