CommerceHub plans to acquire ChannelAdvisor in a joining of two competing SaaS ecommerce platforms combining front-end and back-end capabilities for retailers and brands to help grow their businesses, but one that will face some integration work based on different technologies.
Investors participating in the transaction include Insight Partners, GTCR, Sycamore Partners and Goldman Sachs Asset Management.
The deal, which will close later in the year subject to regulatory approvals, prices ChannelAdvisor shares at $23.10, a 50% premium over its closing price on Sept. 2 and equating to a $663.6 million acquisition. ChannelAdvisor reported 2021 revenue of $167.7 million, up 15.6% from 2020, with net income that increased more than 2.5x to $47.2 million.
CommerceHub, which was acquired by Liberty Interactive in 2010, was spun out again in 2016. Its customers include BJ’s, Dick’s Sporting Goods and Foot Locker. Based outside Albany, NY, the company facilitates drop shipping and marketplace selling, including tools to optimize fulfillment and delivery, while connecting retailers, brand and suppliers through a network of 15,000 entities.
Similarly, ChannelAdvisor, based in North Carolina’s research triangle, helps retailers and brands expand sales across channels with tools that support marketing, feed management, fulfillment and shipping, among others. Customers include Sweetwater, Newell Brands and ASICS.
“CommerceHub and ChannelAdvisor have both established themselves as leading solutions for different segments of online retailers and brands,” said Bryan Dove, CEO of CommerceHub in a release. “By coming together, we can provide an even broader network, enabling our combined customers to grow their businesses by discovering new products, new brands, and new channels.”
“This is a tremendous opportunity for our customers, for our team members and our shareholders,” said David Spitz, CEO of ChannelAdvisor in the release. “This transaction positions the combined company to accelerate innovation and help shape the future of commerce.”
Rick Watson, CEO and founder of RMW Commerce Consulting, worked for 10 years at ChannelAdvisor and had CommerceHub as a client. Watson said the deal creates a “one-stop shop” for retailers and brands looking to access digital channels, while allowing the former competitors to be more focused in product development.
“They can stop spending engineering resources on overlapping areas, like CommerceHub’s marketplace solution it acquired from Mercent in 2015, migrating those few customers over to ChannelAdvisor,” he said. “It also gives CommerceHub a much stronger international presence, especially in the UK, Australia and Germany but other places as well.”
In a LinkedIn blog, Watson said CommerceHub gains “a huge stable of marketplace integrations and large brand customers integrated with marketplaces, much more modern than its own which was the result of (the Mercent acquisition).”
Watson said the deal will make CommerceHub more attractive to retailers, providing them with a greater diversity of supplier partners. Brands, he said, will like dealing with a combined vendor, but integration of two “very different technologies” that will take some work is something for them to consider.