By Jack Derwin
Wesfarmers' plan to shell out $230 million in cash to buy online retailer Catch Group Holdings will deliver a massive payday to the e-commerce group's founding brothers.
If approved by the Australian Competition and Consumer Commission (ACCC), Catch Group founders Gabby and Hezi Leibovich will net about $207 million from the sale.
Wesfarmers hopes to get digital knowhow from Catch Group CEO Nati Harpaz.Credit: Jesse Marlow
Wesfarmers, which owns some of Australia’s most recognisable retails brands including Bunnings, Kmart and Target, revealed on Wednesday it has struck a deal to buy Catch Group, which runs e-commerce businesses including Catch.com.au, Mumgo, Grocery Run and Brands Exclusive.
The Leibovich brothers — who own 90 per cent of the business — founded Catch out of their garage in 2006 before launching group discount store Scoopon in 2010. They sold Scoopon in 2017. That same year they bought collapsed children's wear retailer Pumpkin Patch to revive it as an online brand, selling it on again in 2018.
Catch Group founders Hezi (standing) and Gabby Leibovich have sold the online retailer to Wesfarmers for $230 million.
Under Wesfarmers’ control, the online retailer will be run as a stand-alone operation by Kmart managing director Ian Bailey.
“[We] look forward to leveraging our capabilities to grow the business and accelerate the customer-driven, omni-channel initiatives across Kmart and Target,” Bailey said.
Wesfarmers has been looking around for new acquisitions since it spun off its supermarket chain Coles in November 2018, freeing it up to buy “growth businesses”.
Catch Group must have looked the part to the Wesfarmers board, opening a new 27,000-square-metre distribution centre in Melbourne last year and growing its offering from 35,000 products to 2 million.
Despite fierce competition from Amazon Australia, the group still managed to increase its first-quarter sales this year by about 70 per cent.
It’s the latest purchase by Wesfarmers which has been on a shopping spree since March, eyeing the electric vehicles (EV) market as well as the retail space.
Just last month, it bought out Tesla supplier Kidman Resources for $776 million after a failed $1.5 billion bid to purchase rare earths miner Lynas.
It also purchased tech services Geeks2U to integrate into its Officeworks business.
This story first appeared in Business Insider. Read it here or follow BusinessInsider Australia on Facebook.