Consumer M&A Watch – August 2021 Edition – 7 Mile Advisors
By Lexi Papa | August 31, 2021
E-commerce Edition | August 2021
The E-commerce industry continues to break records with the continued shift in consumer behavior from in person to E-commerce over the past twelve months. Organizations like Amazon, Instagram, Facebook, Shopify, Etsy, and Nike continue to gain momentum by capitalizing on this online trend. Nike has been on the forefront of the E-commerce channel adoption and grew its online sales by 50% in Q4 2021 over the prior quarter. E-commerce now represents 21% of the company’s overall revenue. Examples like this can be found throughout the Retail space and is a major reason deal volumes and valuations remain high. Strategic and financial buyers remain aggressive in acquiring digital marketing and e-commerce service providers to take advantage of the shift in consumer behavior.
These tailwinds are manifesting themselves across the entire marketplace. Those taking advantage of these opportunities are e-commerce platforms such as Adobe, Salesforce, and Shopify, as well as 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. Our extensive experience in the sector is led by Mark Landry, a Managing Director with an impressive career with Unilever spanning more than 20 years. Mark provides us with valuable insights into the M&A market, active investors and strategic buyers, and valuation trends.
Over the past year, Consumer stocks have been lagging the growth of the S&P 500. Consumer stocks are 20% higher YoY compared to the 30% growth experienced by the S&P 500. Revenue multiples are around 5x and EBITDA multiples are around 15x. The 7MA Consumer Index consists of digital and traditional (conventional brick-and-mortar) consumer players.
The best articles from around the web for Consumer Products & Retail industry leaders
- 5 Charts Show Amazon’s Growing Logistics Network as it Puts Inventory Closer to Consumers via Retail Dive
- E-commerce Skyrocketed During the Pandemic. Now Instagram, Facebook, and Snapchat Want in. via Retail Dive
- Shopify Keeps up Blazing Growth with Revenue up 57% via Retail Dive
- Etsy Continues to Grow Sales and Find New Buyers via Digital Commerce360
- Why US B2B Marketplaces are on an E-commerce Fast Track via Digital Commerce360
- Nike’s Q4 Online Sales Jump More than 50% via Digital Commerce360
Insights and intelligence on recent notable industry transactions
Modernist Studio, a high-quality design and ideation boutique in Austin, Texas, that helps clients envision and design valuable products and services, has been acquired by Gorilla Logic, a world-class software development services provider backed by the private equity firm Sverica Capital Management. 7 Mile Advisors acted as the exclusive sellside advisor to Modernist Studio throughout the transaction. More details.
Bounteous, a leading insights-driven digital experience consultancy, announced it has partnered with New Mountain Capital, an investment firm with over $30 billion in assets under management. The partnership will support strategic investments in talent, new service offerings, and the co-innovation enablement methods that Bounteous uses to drive clients’ digital transformation programs. Terms of the deal were not disclosed.
Astound Commerce, a company with a 20-year history of delivering exceptional digital commerce experiences for global brands such as PUMA, L’Oréal, Under Armour, Boohoo, Lovehoney, Halfords, and Crocs, announced that it has reached an agreement with California–based RLH Equity Partners to make a major investment in its business, with additional participation from Salesforce’s corporate investment group, Salesforce Ventures. The terms of the deal were not disclosed.
Sideshow Group, the award-winning independent digital agency, acquired TRGT Digital. TRGT is one of the UK and Europe’s fastest growing and most successful performance marketing agencies with a global remote workforce and a significant presence in the UK, Spain, and India. The terms of the deal 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
7MA provides specialized Investment Banking & Advisory Services to the professional service firms in the Consumer Products & Retail industries. We help our clients determine the right strategic partners for their businesses, transition ownership, raise capital, grow through acquisitions, and evaluate new markets. We advise our clients on M&A and private capital transactions, and provide unique market insights. Our team brings experience and energy to all of our engagements, with a focus on helping our clients navigate a changing marketplace.
To learn more about how 7 Mile Advisors can help you evaluate and execute on strategic M&A or private capital alternatives for your business, please visit our website www.7mileadvisors.com.