SYDNEY, AUSTRALIA: BikeExchange Limited (ASX:BEX) has acquired 100% of the US-based ‘Ready to Ride’ bike delivery and logistics business, Kitzuma, for US$3.375 million.
The acquisition is aligned with BikeExchange’s overall e-Commerce first strategy and pursuing M&A opportunities which enhance the customer journey for purchasing everything bike.
The acquisition of Kitzuma provides a key and unique service for cycling retailers, brands and customers to enable greater e-Commerce bike transactions.
With its proprietary logistics capability, Kitzuma streamlines the journey for both sellers and customers buying bikes online and instore by shipping the bike ‘Ready to Ride’ and importantly removing the need to have the bikes shipped in boxes.
BikeExchange’s Global CEO Mark Watkin said: “Kitzuma’s purpose-built logistics platform, which allows bikes to be transported box-free and fully-built, will eliminate a significant barrier for many customers purchasing a bike online – having to unpack and assemble it. Kitzuma will be a compelling white-glove service for retailers and brands using the BikeExchange marketplace and broader.”
“From the early meetings with the Kitzuma team there was clear chemistry and alignment on the synergies and opportunities for the collective business. The Kitzuma acquisition is transformative for BikeExchange and will be a significant driver for our e-Commerce first strategy and enhancing both the seller and customer journeys for buying and selling bikes. In a short space of time, Kitzuma is now delivering across the entire US and we aim to replicate the business in Australia and Europe in time.”
The three founders of the Asheville, North Carolina-based Kitzuma, Taylor Essick, Chris Cosgrove and Tony Eggers, will remain with the business and will play pivotal roles in the continued growth of Kitzuma and integration with BikeExchange.
Kitzuma CEO and Founder Taylor Essick said: “We are clearly delighted with the acquisition announcement. Since the initial meetings with Mark and the team at BikeExchange we could see the significant opportunity and potential to create a strong end to end process for buying, selling and shipping bikes.
“The Kitzuma service is already providing a unique service with the ‘Ready to Ride’ bike deliveries. We want to see this model grow and expand in North America and around the world. The breadth of choice across retailers and brands and the regional footprint of BikeExchange is an excellent foundation to build from with the Kitzuma model. Chris, Tony and myself are excited for the transition and growth to come.”
Consideration for the Kitzuma acquisition is equity funded. The consideration comprises of US$2,250,000 satisfied in deferred BEX shares at an issue price of $0.157 per share (totaling 19.93 million shares – representing 67% of the acquisition price) and a smaller cash component of US$1.113m (33% of the acquisition price – paid on completion out of existing cash reserves.) The deferred shares will be issued to the vendors over a period of up to 5 years.
The vendors can receive up to 50% of the BEX deferred shares 12 months after completion, with the remaining 50% to be received no earlier than 24 months after completion (and up to 5 years from the completion date.). An Appendix 3B in relation to the deferred BEX shares will be lodged today.
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