In February, Supply Chain Matters Highlighted a sampling of funding flowing into the broad supply chain technology support areas including that of B2B Business Network and B2C Customer Fulfillment support network.
This week, private equity firms GTCR LLC and Sycamore Partners announced intent to acquire E-Commerce firm CommerceHub for a reported $1.1 billion all-cash deal, a significant sum.
CommerceHub describes its capabilities as a distributed commerce network connecting supply, demand and delivery helping retailers and brands increase sales by expanding product assortments, promoting products on the channels that perform, and enabling rapid, on-time customer delivery. Principal support is in supporting supplier drop-ship efforts to end customers.
Their web site cites retail customer names such as BestBuy, JC Penny, Sears, ToysRUs Walgreens and Walmart. Industry vertical customers are cited as Dell, General Electric, KonicaMinolta, Seiko and Whirlpool, among others.
This tech provider has had a rich history.
Founded in 1997 to develop e-commerce integration services, the platform served as an alternative to existing VAN and EDI transactional networks. After receiving a multi-million-dollar infusion in 2000 from Interactive Technology Holdings, followed by the technology adoption of iQVC, the online retailing division of QVC.
CommerceHub was acquired by QK Holdings, a supply-chain management company, in an all-cash transaction, announced in August 2006 the company was subsequently acquired by Liberty Interactive Corporation in 2015, the acquirer being the parent company of QVC Group and its associated shopping network and was spun-off with e-commerce travel site Liberty Expedia Holdings.
Reporting on this development, The Wall Street Journal indicates that CommerceHub’s annual revenues in 2017 were $111.1 million, and thus, this latest transaction pegs the tech provider at a premium of over ten-times annual earnings. The publication further indicates that new gains in retail customers have been offset by retailer bankruptcies. Yet, the company continues to position itself as helping retailers better compete with Amazon.
Similar to other privatization deals and specifically supply chain B2B Business Network tech provider e2Open, it is likely that the private equity owners will assimilate added functionality and additional vertical industry support capabilities in the area of supporting drop-ship or avoiding larger inventory investments.
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