Consumer M&A Watch – April 2021 Coverage
By Lexi Papa | April 15, 2021
E-commerce Edition – April 2021
Actionable intelligence for leaders in the Consumer Products and Retail industry
The impact of COVID-19 on consumer behavior is undeniable. Consumers have shifted shopping behaviors to the digital world. As a result, more than 75% of Americans tried out new products or services that they want to continue using in the long-term. This shift in consumer behavior created a never before seen increase in global digital commerce activity. Consumers doubled down on digital as the year went on, culminating in a 56% growth in Q4, according to data from the Salesforce Shopping Index.
It is believed that these changes in behavior will not simply reverse when the situation around COVID-19 improves, but rather that the behaviors will stay as many consumers see the convenience and efficiency in purchasing products and services online. This also confirms a survey by McKinsey about consumer sentiments in the US, which reports that about 40% of Americans see cost savings when shopping online and with as much as 70% of Americans believing that COVID-19 will have a lasting impression on personal routines.
These tailwinds are beginning to manifest themselves across the entire marketplace. Those taking advantage of these tailwinds are e-commerce platforms such as Adobe, Salesforce, Shopify, technology service organizations implementing these platforms, and consultancies advising their clients on improving market share in the current marketplace. 7 Mile has advised many companies in this space on their transactions, such as Zilker in its sale to EY and Something Digital in its sale to Genpact. Zilker is a digital consultancy and systems integrator focused on creating lasting and valuable customer experiences, with deep sector experience in consumer products, healthcare, financial services, energy, and utilities. Something Digital also has deep expertise in e-commerce and is a digital specialist partnering with industry-leading enterprise accounts to help them build, maintain, and optimize robust e-commerce solutions.
The marketplace continues to show the same velocity and momentum in 2021 as it did at the end of 2020, and consumer and investor appetite continue to reflect the tailwind market. Consumer stocks continue to trade at healthy revenue and EBITDA multiples, with Revenue multiples staying steady between 4x and 5x over the last year, and EBITDA multiples continue to hover around 20x.
The best articles from around the web for Consumer Products & Retail industry leaders
- Lululemon More than Doubles E-commerce in 2020 via Retail Dive
- How Nike is Using DTC and Data to Expand its Empire via Retail Dive
- Manufacturers Project 2-year Spike in B2B Digital Sales via Digital Commerce 360
- CPG Brands Doubling Down on Direct-to-Consumer E-Commerce via E-commerce Times
Insights and intelligence on recent notable industry transactions
- Avionos, which designs and implements marketing and commerce solutions, today announced its acquisition of ObjectWave, an e-commerce consultancy headquartered in Chicago. ObjectWave, a leader in digital commerce strategy and development, augments Avionos’ already strong position as a commerce and digital experience solution provider with partners like Adobe and Salesforce for enterprise B2B and consumer-focused companies. “I couldn’t be more excited about what this acquisition means for the next stage of our emergence as a market-leading digital solutions provider,” said Scott Webb, CEO of Avionos. “We’ve built Avionos with a relentless focus on profitable growth by delivering digital solutions that drive customer value. The addition of ObjectWave’s team, with their years of e-commerce expertise, and the value of our combined client list, positions us to accelerate that growth by capitalizing on the incredible demand for digital commerce and marketing now and in the years ahead.” The terms of the transaction were not disclosed.
- Leading digital marketing group, Incubeta, announced it has acquired e-commerce experts, Groundswell. The acquisition of the Belfast-based company will expand Incubeta’s reach to e-commerce clients worldwide. Groundswell, founded in 2017, brings with it customers including STATSports, The Pro’s Closet, and WiggleCRC, among others. “We are thrilled to be joining Incubeta, a company we have worked with over the last several years, and look forward to creating many more successes together. We remain focused on partnering with existing and new clients to accelerate their growth online and as part of Incubeta we can now offer an unrivaled service, creating opportunities for them to maximize their potential,” said Mark Lilley, Co-founder, and Director at Groundswell. The terms of the transaction were not disclosed.
- Deloitte is acquiring digital consulting firm, The Working Group Inc. (“TWG”), to aid its mid-market and large clients in digital and cloud transformation, and bolster Deloitte’s global digital strategy. Founded in Toronto in 2002, TWG is a recognized market leader in designing and developing modern applications and data platforms. Laser focused on helping companies become fluent digital organizations, TWG builds and improves their clients’ digital products, experiences, and culture. “We’re excited to welcome TWG into the fold, not only because of their recognized brand and seasoned leaders – but also their strong reputation combined with their focus on the mid-market and large clients – as well as their commitment to diversity and inclusion,” said Anthony Viel, Chief Executive Officer at Deloitte Canada. The terms of the transaction were not disclosed.
See our latest Sectorwatch research reports for a comprehensive list of Consumer industry M&A activity and valuation trends.
About 7 Mile Advisors
7 Mile Advisors provides Investment Banking & Advisory Services to the Business Services & Technology industries globally. 7 Mile Advisors advises on M&A and private capital transactions, and provides market assessments and benchmarking. As a close-knit team with a long history together and a laser focus on our target markets, 7 Mile Advisors helps its clients sell companies, raise capital, grow through acquisitions, and evaluate new markets. For more information, including research on the M&A markets, visit www.7mileadvisors.com.
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