Are Dutch Live Auctions the next step for ShopHQ?
Eden Prairie-based iMedia Brands Inc. plans to spend approximately $ 95 million to acquire a Germany-based interactive retail company that specializes in selling items through a proprietary auction process .
The deal with 123tv gives iMedia market access in Germany and Austria as well as the expertise and technology to sell items through live and automated Dutch auctions.
iMedia is the parent company of ShopHQ, the cable, satellite and broadcast television network.
Tim Peterman, chief executive of iMedia, said the introduction of 123tv’s auction process and technology in the United States could disrupt the digital shopping experience.
âWe believe that gamification of the shopping experience based on consumer emotions is the ultimate break from the status quo,â Peterman said in a press release. âThe entrepreneurial team of 123tv with its proprietary technologies is expert in this disruption of purchases. “
Dutch auctions can be done in a number of ways, but usually depend on the bidders to set the price of the item, which can create a gambling atmosphere. In some Dutch auctions the price starts at a high level and then the price drops. until one or more offers are accepted.
Much like ShopHQ, 123tv Group sells clothing, watches, jewelry, health and wellness products, as well as home and garden products through TV channels, online, and a mobile app.
Founded in 2004, 123tv is now a $ 183.4 million company with 120 employees.
Profits have skyrocketed in recent years, with a profit of $ 6.1 million in 2020, down from around $ 1 million the year before.
iMedia posted revenue of $ 454.2 million for its most recent fiscal year ended Jan. 31. Its annual revenues fell for the fifth year in a row and have consistently posted net losses over this period.
123tv is primarily owned by ARCUS Capital AG, an independent investment company based in Germany, and its investment partners BE Beteiligungen and IRIS Capital.
iMedia plans to pay for the acquisition in part through a new $ 75 million bond offering. The final transaction price could increase up to $ 50 million depending on the achievement of revenue targets.
iMedia expects the deal to be finalized in the fourth quarter of 2021. It is subject to German and Austrian government approvals.
Shares of iMedia closed at $ 5.65 per share, up 6.6% on Wednesday. Over the past 52 weeks, stocks have fluctuated between $ 3.93 and $ 10.48 per share.