- Homewares retailer Adairs (ADH) has entered into a binding agreement to acquire all of the shares of Mocka for roughly $75 million
- Mocka is a Christchurch and Brisbane-based online home and living products retailer
- Adairs considers this an ‘attractive’ acquisition to expand its offerings and add diversity for shareholders
- This deal will see Adairs’ online sales increase from 17 per cent in the 2019 financial year to almost 30 per cent in FY2020
- Adairs is up 20 per cent today and shares are trading for $2.13 each
Homewares retailer Adairs (ADH) has entered into a binding agreement to acquire all of the shares of Mocka for roughly A$75.5 million (NZ$80 million).
Mocka is an integrated pure-play online home and living products designer and retailer with operations in Australia and New Zealand. It exclusively sells functional and stylish home furniture and decor as well as and kids and baby products.
The home and lifestyle products retailer reportedly does all of its work in-house, which make it especially unique.
Mocka distributes products from Brisbane and Christchurch and these operations will continue to support the business.
Adairs considers this as an ‘attractive’ acquisition to expand its offerings and a more diverse business for shareholders.
“We have shared DNA in that we are both design-centric with in-house product design and development which allows us to offer our customers high quality ‘design led, value for money’ differentiated product,” Adairs Managing Director and CEO Mark Ronan said.
According to Mark, adding Mocka to its portfolio will also be financially lucrative, including an online sales increase from 17 per cent of total sales in the 2019 financial year to almost 30 per cent this financial year.
“Mocka is highly profitable and cash generative with low recurring capex and lease commitments. The acquisition is expected to deliver normalised earnings accretion of approximately 10 per cent in FY20,” Mark said.
The acquisiton will be funded through a combination of Adairs’ group term debt facilities and an issue of 3.2 million ordinary shares to the vendors.
Approximately 65 per cent of the consideration will be paid at settlement this month and roughly A$5.7 million (NZ$6 million) will be paid in ADH shares with the outstanding balance, A$43 million (NZ$46 million), transferred in cash.
The remaining 35 per cent will be paid in stages over the next two to three years in accordance with on Mocka’s earnings.
Adairs is up 20 per cent today and shares are trading for $2.13 each at 12:08 pm AEDT.