New Zealand's first e-commerce-only retailer Mighty Ape has been sold to Australian retail and insurance company Kogan for A$122.4 million ($128.3m).
Kogan.com has acquired 100 per cent of the business, however, Mighty Ape founder Simon Barton will stay on as chief executive of the organisation.
Mighty Ape has more than 895,000 subscribers and in the 12 months to September generated more than A$120m in revenue and gross profit of A$37.8m. For the current financial year ending March 31 2021, the online retailer is forecasting revenue of A$137.7m, gross profit of A$45.7m and ebitda of $14.3m.
Under the takeover deal, Kogan will purchase the company for A$122.4m over four payment tranches, funded by the company's cash reserves, as part of its plans to accelerate its growth across Australia and New Zealand.
Mighty Ape's executive team have been retained to at least deliver the FY23 financial result.
Kogan says the acquisition and merger of the two marketplaces will enable Mighty Ape to scale using Kogan infrastructure and will significantly boost the Australian company's share in the New Zealand market.
Kogan.com chief operating officer and chief financial officer, David Shafer, said Kogan was "a natural home" for Mighty Ape, sharing similar histories and shared values.
"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 and 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," Shafer said in a statement.
Kogan says there are expected to be "significant revenue and cost synergies" under the merged group.
Simon Barton, major shareholder and chief executive of Silverdale-based Mighty Ape, said the company was happy to be joining forces with Kogan.com Group for the next stage of its growth.
"Combining with Kogan.com will assist Mighty Ape to expand our product range and improve our customer experience. I am excited about working with David and Ruslan 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."
Kogan is listed on the Australian Stock Exchange and was founded by Ruslan Kogan, who acquired the intellectual property of failed electronics retailer Dick Smith.
Mighty Ape launched in the 1990s, originally as Gamezone with bricks and mortar stores, and in the early 2000s began extending its product range to DVDs, computer hardware, music and books. It became an e-commerce-only retailer in 2008 after a major rebrand.
The online retail market in New Zealand is expected to be worth $6.8 billion by 2026. Now worth around $5b, it is expected to grow by 14.6 per cent year-on-year from FY20 to FY21.
New Zealanders spent 33.4 per cent more on domestic e-commerce sites in September compared to the same month a year earlier, and two-thirds of the population is now regularly shopping online.