Mon, 23 May 2022 | BUSINESS SALE
Moonpig has announced a deal to acquire gifting experience business Buyagift for £124 million. Moonpig says that the acquisition will deliver a “step-change” in its offering and helps to accelerate its strategy to establish itself as “the ultimate gifting companion”.
Buyagift, the trading name of Smartbox Group UK, is a platform that offers a wide variety of gift experiences, which range from food and drink, spa days and romantic getaways for couples, to supercar driving and helicopter flying.
Under the Buyagift and Red Letter Day Brands, Smartbox has around 3.3 million customers and has grown to be a leading provider in the £6 billion gifting experiences sector of the UK’s gifting industry. While the company has seen solid growth over the past decade, Moonpig says it is confident that it can accelerate this even further by leveraging its tech, data and brand-building capabilities and driving cross-sell opportunities.
The acquisition fee represents a multiple of slightly over 4.2x Smartbox’s turnover of £29 million for the year ending April 30 2021, although this was down 25 per cent from £38.6 million a year earlier, while post-tax profits fell from £12.3 million in 2020 to £7.1 million last year.
Moonpig CEO Nickyl Raithatha commented: “The proposed acquisition of Buyagift rapidly accelerates Moonpig Group’s journey to become the ultimate gifting companion. There is strong strategic rationale for the transaction, and compelling financial benefits.”
“Buyagift is profitable and highly cash generative, with a proven track record of strong growth and we are excited by the ways that we can further transform the business using the group’s proven playbook.”
“We see significant potential for the cross-selling of gifting experiences to Moonpig Group’s loyal customers. We look forward to working with the Buyagift team to deliver an enhanced proposition for our customers and to create value for our shareholders.”
The deal is forecast to close by the end of July 2022 and Moonpig says it expects revenue for the enlarged group to hit around £350 million in the 2023 financial year.
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