Woolworths rings up $243m docket for majority stake in MyDeal
Woolworth’s bid for 80% of MyDeal values the company at $271.8 million and gives it an enterprise value of almost $243 million.
Woolworths Group (ASX: WOW) has rung up a $243 million bill to acquire a majority 80% stake in retail marketplace MyDeal.com.au (ASX: MYD).
The transaction is expected to enhance the supermarket giant’s online capabilities and complement its existing businesses.
Under the terms of a scheme implementation agreement, Woolworths has offered MyDeal an all-cash consideration of $1.05 per share, representing a 62.8% premium to MyDeal’s last closing price of $0.65.
It values MyDeal’s equity at $271.8 million and indicates an enterprise value of $242.6 million.
MyDeal founder Sean Senvirtne (who has 47.3% equity in the company) and other key managers will retain a combined 19.8% interest in MyDeal and continue to lead the business through its next phase of growth in partnership with Woolworths.
In order to achieve this capital structure, Mr Senvirtne will offload 60% of his current MyDeal shares, while chief product officer Kate Dockery and chief merchandising officer Dean Ramler will sell 70% of their respective MyDeal shares into the transaction.
Mr Senvirtne has also granted Woolworths a conditional call option over 19.9% of his MyDeal shares.
Upon completion of the transaction, Woolworths will own 80.2% of MyDeal.
MyDeal will then be delisted from the ASX once the transaction is approved.
Enhancing capabilities
The addition of MyDeal to the Woolworths stable is expected to enhance the group’s marketplace capabilities, particularly in furniture, homewares and other bulky goods.
It will complement existing general merchandise offers by discount department store subsidiary Big W and will give MyDeal access to Woolworths’ platforms and capabilities to support its continued growth.
Woolworths chief executive officer Brad Banducci said the acquisition would expand the chain’s offerings past groceries.
“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,” he said.
“It will also support MyDeal’s growth by accessing capabilities across e-commerce, supply chain, retail, loyalty and more.”
Online marketplace
Established in 2011, MyDeal has grown to become one of Australia’s leading online marketplaces, with approximately 1900 online sellers offering more than six million products with a focus on furniture, homewares and everyday needs.
It has more than one million active customers and generated a gross transaction value of $260 million for the 12 months to 31 March.
MyDeal’s board has unanimously recommended that shareholders vote in favour of Woolworths proposed acquisition.
MyDeal shareholders Silver Globe Investments Pty Ltd and Aavasan Pty Ltd — which together hold or control 28.6% of MyDeal shares — have already confirmed their approval of the deal.