Kogan Heads Across The Ditch With Might Ape Acquisition

By Glenn Dyer | More Articles by Glenn Dyer

Online retailer Kogan has paid $122 million for a New Zealand based gaming and technology-focused website called Mighty Ape.

It’s Kogan’s second deal this year and much larger than the $4.4 million it paid for retailer, Matt Blatt in May.

The news saw Kogan shares shake off their recent weakness and jump more than 7% to $17.35

In a statement on Thursday announcing the deal Kogan said Mighty Ape would bring more than 690,000 users, 895,000 subscribers and revenue of more than $120 million and gross profit of nearly $38 million.

Kogan claims it can grow Mighty Ape’s revenue through various synergies and providing the retailer with access to Kogan’s supply lines and retail technology.

“…without the benefit of any synergies that may be available as a result of this acquisition, Mighty Ape is forecast to generate Revenue of $137.7 million, Gross Profit of $45.7 million and EBITDA of $14.3 million,” Kogan forecast yesterday.

The price to Kogan of $122.4 million will be a four tranche earn-out based on Mighty Ape’s earnings for the 2022 and 2023 financial years.

Mighty Ape has 161 staff in New Zealand, along with a purpose-built distribution centre in Auckland.

Naturally Kogan thinks the deal is great, as co-founder David Shafer said in yesterday’s statement to the ASX.

“We are pleased to be bringing the iconic Mighty Ape into the Kogan Group, and are delighted to be welcoming (CEO) Simon Barton and his team. We are a natural home for Mighty Ape, given similar histories and shared values — most importantly our obsession with delighting customers, and continually improving the online shopping experience.

“Mighty Ape has more than a decade of experience and track record of delighting Kiwi customers, and has become one of New Zealand’s most trusted brands.”

“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, 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,” he said.

Glenn Dyer

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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