Pure play online retailer Shoply has bought the pioneering Australian IT website eStore.com.au and its estimated $7 million in annual revenue.
eStore, with 25,000 products online and a database of 64,000 customers, leads in several technology brands and is the number one Australian online reseller of Microsoft digital download products. It was recently ranked 89th on Power Retail’s Top 100 Australian online retailers.
Lorenzo Coppa, who founded eStore in 1991, will be joining the Shoply board of directors later this month.
Shoply CEO Simon Crean says estore is a highly synergistic acquisition.
“The business is very complementary to our Warcom business and will allow us to increase our depth in this market to become a much stronger player,” he says.
“This segment of the market presents an exciting growth opportunity, with a growing demand for technology upgrades required by the ever-increasing technology requirements of organisations, as well as the reinvestment driven by the roll out of the National Broadband Network.”
Shoply will pay $500,000 cash upfront plus $250,000 in Shoply shares for eStore. On top of that, an amount up to $1.05 million in Shoply shares will be paid progressively, subject to eStore meeting performance hurdles over the next two years..
Shoply says the deal will increase the company’s forecast revenue base to $25 million in the 2016 financial year.
In its half year results to December, Shoply posted revenue growth of 548% to $8.4 million and forecast the full year at $18 million. It posted a loss of $1.116 million for the six months.
Shoply shares are trading down 5.8% today to $0.016.