Kogan to maintain Mighty Ape staff, branding

Australian online retailer Kogan.com has acquired 100% of once-Kiwi powerhouse Mighty Ape for AU$122.4 million/NZ$128.32 million.

We can report that Mighty Ape will continue to operate under its branding, keeping Simon Barton (pictured above) on as CEO as well as the rest of the staff. Kogan recognises Mighty Ape's success and plans to support the company with resources where necessary.

Mighty Ape operates online stores in New Zealand - Australia and is a leading online retailer in New Zealand with more than 690,000 unique customers and more than 895,000 subscribers.

Mighty Ape has significant operations in New Zealand, employing 161 permanent full-timers, as well as operating a purpose-built distribution centre in the north of Auckland.

The facility allows Mighty Ape to deliver its market-leading shipping capability across New Zealand with same-day delivery to Auckland, Hamilton, Wellington and Christchurch, as well as servicing the Australian market.

Consumers across New Zealand have utilised Mighty Ape for years as it has gained a reputation for fast delivery and excellent customer service, demonstrated by Mighty Ape achieving Kantar's highest rank among retailers in New Zealand for customer experience.

A release from Kogan on the acquisition states that this is "A highly complementary acquisition of one of New Zealand's leading online retailers, this acquisition combines two market leaders, enabling Mighty Ape to build on its strong customer offering, and providing the infrastructure and expertise for Mighty Ape to further scale … Mighty Ape is a natural strategic acquisition choice for Kogan.com.

Mighty Ape is forecast to generate revenue of over $130 million and a gross profit of nearly $50 million.

Details of the acquisition are as follows:

• Purchase price: headline enterprise value of AU$122.4 million, payable over 4 tranches and subject to variation under earn-out through to delivery of FY23 financial results (see Annexure A of The Presentation), and completion adjustments
   
• Assets purchased: 100% of the issued capital of Mighty Ape Limited
   
• Funding: funded from the Company's cash reserves 

"We are pleased to be bringing the iconic Mighty Ape into the Kogan Group, and are delighted to be welcoming Simon Barton and his team. Mighty Ape has more than a decade of experience and track record of delighting Kiwi customers, and has become one of New Zealand's most trusted brands," says Kogan.com COO and CFO David Shafer.

"Mighty Ape will give us significant scale in New Zealand and further strength across a variety of operational dimensions. We will be drawing on Mighty Ape's deep experience in gaming, toys, other entertainment product categories and the New Zealand market, and combining this experience with Kogan.com's sourcing, technology, systems, infrastructure, and marketplace capabilities, to further enhance the group's already market-leading offering across the Tasman."

Mighty Ape founder and CEO Simon Barton adds, "The Mighty Ape team is very happy to be joining forces with the Kogan.com Group, as we embark on the next stage of our growth. Combining with Kogan.com will assist Mighty Ape to expand our product range and improve our customer experience. I am excited about working with Ruslan and David, and the broader Kogan.com team – who have built an incredible business – while also aligning and creating more growth opportunities for the incredible team that helped build Mighty Ape to be New Zealand's most trusted retailer brand."