Online retailer Kogan is believed to be on the hunt for acquisition opportunities with some suggesting Adore Beauty could be within its sights.
Kogan, founded and run by 14.49 per cent shareholder Ruslan Kogan, has a market value of $371m and its share price is around $3.57.
It soared over $24 during the pandemic lockdowns of 2020, taking its market value to more than $2.5bn.
The market value of online cosmetics retailer Adore Beauty is $141.2m and its share price is around $1.54.
Like Kogan, it prospered from the 2020 lockdowns, listing as a business then worth $635.3m at a time that online company values were soaring.
Adore Beauty raised $269.5m and its shares were priced at $6.75.
Sources say Adore Beauty could make sense for Kogan because it offers an entry into the health and beauty space, and Kogan’s strategy so far has not had the success hoped for. It has offered services in other parts of the market such as energy and internet, as well as retail.
Adore’s former owner Quadrant Private Equity still owns a 32.5 per cent stake, so it may be a seller.
Founder Kate Morris owns 10.8 per cent.
Adore Beauty announced the resignation of its chief executive Tennealle O’Shannessy in August when she was hired to run IDP Education.
The company generated a 181 per cent increase in annual net profit to $2.4m as revenue increased 11 per cent.
Kogan generated an 8 per cent fall in annual revenue to $718.5m and a $36m loss compared to a $3.5m profit last financial year.
The online retailer sells exclusive brands such as Kogan, Ovela, Fortis, Vostok and Komodo online, and products sourced from imported and domestic third-party brands such as Apple, Canon, Swann and Samsung.
While delivering its results last month, it said the business suffered from higher logistics costs and other costs on the back of Covid-19 interruptions.
It has been working towards a leaner business model by right-sizing inventory and reducing operating costs after it ordered too much stock and was left with excess inventory such as TVs, kitchen appliances and consumer electronics.
In addition to product offerings, Kogan.com earns revenue from seller fees from Kogan Marketplace and commission-based revenue from the verticals including Kogan Mobile, Kogan Internet, Kogan Insurance, Kogan Money, Kogan Cars, Kogan Energy and Kogan Travel verticals.
It has $31.2m of net cash and generates most profit from exclusive brands.
Is it third time the charm for Star equity raising?
There’s talk Star Entertainment once again has an equity raising on its agenda.
Chinese suitor to offload $300m CSG asset
Buyers like Beach Energy and GLNG are tipped to circle Westside Energy’s stake in the Meridian gas plant.