Acquisition of Retail Meetup to accelerate omnichannel strategy



  • First of its kind digital networking format and technology with proven monetisation
  • Initially adds four high quality fully digital events to accelerate evolution of omnichannel strategy
  • Earnings enhancing in first full year of ownership and immediately brand enhancing
Hyve Group plc today announces the acquisition of Retail Meetup, LLC (“Retail Meetup”) for an initial consideration of £18.8m[1], with an earn out capped at £9.0m[1] based on the EBITDA of the two events scheduled for FY21, payable in Q4 FY21. Retail Meetup is a first of its kind digital event format for the ecommerce market that enables attendees to network and trade at scale. The acquisition will be funded through existing debt facilities and cash reserves.

A proof of concept for the format, Shoptalk Meetup, took place in October 2020, delivering more than 18,000 meetups over 12 hours, among 2,100 participants, achieving outstanding customer feedback and delivering revenue of £1.8m[2] and EBITDA of £1.4m[2].

Following the success of this first event, four additional events are now planned for 2021 (two in FY21 and two in FY22), with a highly encouraging initial customer response and strong sales performance. Groceryshop Spring Meetup (9-11 March 2021) and Shoptalk Meetup for Women (11-13 May 2021) are scheduled to take place in FY21, while Shoptalk Europe Meetup (dates tbc) and Shoptalk Fall Meetup (19-21 October 2021), are scheduled for FY22. All are planned at times of the year to be complementary to the in-person event, giving Shoptalk and Groceryshop the opportunity to meet customer needs at multiple points through the year. Retail Meetup predominantly generates revenue through paid ticket sales and fees for certain types of meetings, with the potential to sell sponsorship, which has already been validated by early sales on 2021 Meetups.

COVID-19 has demonstrated that whilst in-person events remain a critical forum to learn, network and trade, customers now want more touchpoints across the year in a more diverse range of formats. An omnichannel strategy is the only way to meet this evolving customer need. Retail Meetup provides Hyve a flagship digital format, showing that digital online events can cater to the customer need to network and trade, whereas previous webinars and other virtual versions of in-person events have largely been limited to learning and brand marketing.

Acquisition highlights:
  • Accelerates Hyve’s digital evolution and delivery of Hyve’s omnichannel strategy
  • Proven monetisation through the October 2020 proof of concept event, Shoptalk Meetup. Retail Meetup is expected to generate revenue of £1.8m[2] and EBITDA of £1.4m[2] in the year ending 31 December 2020 with gross assets at completion estimated to be approximately £nil
  • Represents strong value for Hyve, at an attractive EBITDA multiple, with limited risk due to successful proof of concept and limited further investment required
  • ROIC[3] is expected to be greater than the Group’s WACC in the first full financial year post acquisition
  • Retail Meetup is expected to be highly cash generative
  • Adds four high-quality virtual events that are expected to be earnings enhancing with clear potential to scale
  • Provides scope to launch new virtual Shoptalk and Groceryshop events globally across the ecommerce retail sector with nominal additional development cost required
  • Includes the acquisition of the software source code and a perpetual license to use the Meetup technology already developed to serve the Shoptalk and Groceryshop portfolio
  • Complements Shoptalk and Groceryshop’s in-person events, with potential to enhance their in-person proposition and further accelerate their growth
Retail Meetup, LLC will be acquired from its founders, Anil D. Aggarwal and Simran Rekhi Aggarwal, who will continue to work with Hyve until June 2021 to ensure optimal integration and success of the two H1 Retail Meetup events.

Mark Shashoua, CEO of Hyve Group plc said:

“We service three fundamental customer needs, bringing people together to learn, network and trade. Where in-person events provide an opportunity to accomplish all three of these objectives, up until now, digital events have broadly catered only to the ‘learn’ component focussing on online content. Retail Meetup turns this reality on its head, creating a first of its kind commercial proposition to bring the entire retail and grocery ecosystem together to network and trade at scale in a digital format. Digital hosted meetings have the proven potential to bring together thousands of decision makers over a short period of time in a format that delivers strong returns on both time and investment.

“Retail Meetup is a hugely exciting venture for Hyve, this will become the cornerstone of our omnichannel strategy and a blueprint for future growth. COVID-19 has accelerated the evolution of customer behaviour and expectations. We believe that the future of servicing customer needs is omnichannel, with in-person and digital events driving engagement across the year. Retail Meetup positions us at the forefront of our industry, exiting 2020 with a compelling customer proposition and vision for the future. With four digital events already planned, this acquisition will be immediately earnings enhancing, with minimal further investment required to deliver strong revenue and profitability through a new and expanding channel.”

Notes:
  1. Exchange rate of £1.00 : $1.33, as at 21 December 2020
  2. Using an assumed exchange rate for 2020 of £1.00 : $1.30
  3. ROIC defined as net operating profit after tax divided by total deal costs (being consideration paid, integration costs, and transaction costs)
For further information please contact:
Hyve Group plc
Mark Shashoua / John Gulliver
 
 
+44 (0)20 3545 9000
 
FTI Consulting
Charles Palmer / Emma Hall / Chris Birt / Jamille Smith
 
 
+44 (0)20 3727 1000
 

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