Amazon Aggregators Branded and Heyday are planning to merge, according to information obtained by CNBC, amid further consolidation in the e-commerce industry that has boomed during the coronavirus pandemic.
Heyday CEO Sébastien Limartz said in a memo to employees on Monday that the combined companies would create a new company called Essole, French for “flight,” that would “embody our vision of taking brands to new heights through our platform.”
The new name will be officially announced soon, and the combined companies are expected to generate $400 million in annual revenue, Reimers wrote.
Apollo Global Management and BlackRock are reportedly in talks to provide new debt financing to help the combined company make further acquisitions. BloombergHe said this citing a source close to the matter.
“As I’ve said before, this merger marks the culmination of an effort that began more than a year ago to find a partner that could help us advance our mission, accelerate our goals and strengthen our balance sheet,” Reimers said. “Branded is the perfect partner.”
Representatives for Heyday and Branded did not immediately respond to requests for comment. BlackRock declined to comment, and Apollo did not immediately respond.
In connection with the merger, Heyday is expected to implement major job cuts — as many as 70% of employees could lose their jobs — according to the people, who asked not to be identified because the cuts have not been announced. Branded will absorb Heyday’s technology team and several brands, including skin-care line Zitticca and Boca, which makes fluoride-free toothpaste and other dental-care products, the people said.
Heyday and Branded are part of a crowded and volatile market for Amazon seller aggregators, a sector in which companies are capitalizing on low interest rates and the pandemic-fueled growth in e-commerce to buy. Over $16 Billion Raised Aggregators have come from top Wall Street and Silicon Valley firms with the goal of bringing independent sellers onto Amazon’s marketplace. They have attracted the attention of big-name investors like L. Catterton, BlackRock and even Jared Kushner’s Affinity Partners.
Cracks began to appear in 2022 as venture funding for cash-strapped startups dried up and e-commerce demand cooled as consumers returned to brick-and-mortar stores, with aggregators suddenly struggling to operate the brands they’d acquired profitably.
The once-successful aggregator company, Thrasio, an early leader in the aggregator space, filed for bankruptcy in February and lost several key executives. Consolidation among aggregators has accelerated over the past year. Prior to the deal with Paris-based Branded, Heyday had explored a possible partnership with Dragonfly, which has backers including L. Catterton, but the talks fell apart, CNBC previously reported.
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