Noni B has agreed to pay “a nominal consideration” for 50.1 per cent of NZ-based clothing and homewares retailer EziBuy in a move it says will increase its online capabilities.
The ASX-listed clothing retailer, which also owns brands including Rivers and Katies, says it will acquire the stake on a cash-free debt-free basis and has an option to require the remainder from Sydney-based investment firm Alceon Group for $11 million in cash.
Noni B says the move will increase its online sales to approximately $200 million, representing 20 per cent of its total revenue, give it access to a database of more than two million new customers, and lead to $9 million in synergy cost savings in FY21.
Noni B managing director and chief executive Scott Evans said EziBuy, which started in 1978 as a mail order catalogue before moving online, represented a low-risk opportunity to fast-track his company’s digital strategy.
“The terms of the transaction are very attractive for our group and we are confident it will be highly value accretive,” Mr Evans said.
“It is complementary to our existing portfolio of brands, offering cross-selling opportunities, new category growth and geographical expansion for both businesses.”
Stripping out one-off items, EziBuy posted earnings before interest, tax, depreciation and amortisation of $NZ400,000 ($A377,000) in FY19.
The deal is subject to approval by Noni B shareholders at a December 23 meeting.
Noni B shares were worth $2.55 before the market opened, having been as high as $3.40 in September.