Amazon Aggregators Branded and Heyday are planning a merger, CNBC has learned, as a segment of the e-commerce industry that boomed in the course of the Covid era continues to consolidate.
In a note to employees on Monday, Heyday CEO Sebastian Rymarz said the merged corporations would form a brand new company called Essor, which suggests “take off” in French and “embodies our vision of taking brands to new levels through our platform,” he wrote.
The latest name will likely be officially announced in the approaching days and the merged corporations are expected to generate annual sales of $400 million, Rymarz wrote.
Apollo Global Management and BlackRock are in talks to supply latest debt financing to assist the combined company make further acquisitions, in accordance with an announcement. Bloombergciting people conversant in the matter.
“The merger is the culmination of an effort that began over a year ago to find a partner that can help us advance our mission, accelerate progress toward our goals and strengthen our balance sheet, as we have discussed in the past,” Rymarz said. “Branded is the perfect partner.”
Representatives for Heyday and Branded didn’t immediately reply to requests for comment. BlackRock declined to comment and Apollo had no immediate response.
In reference to the merger, Heyday is predicted to perform an enormous wave of layoffs that would lead to as many as 70% of employees losing their jobs, in accordance with an individual conversant in the matter who asked to not be identified since the cuts haven’t yet been announced. Branded will acquire Heyday's technology team and several other brands, the person said, including skincare line ZitSticka and Boka, which makes fluoride-free toothpaste and other dental care products.
Heyday and Branded are a part of the crowded and turbulent market of Amazon seller aggregators. Companies on this space took advantage of low rates of interest and pandemic-related growth in e-commerce to jointly generate greater than $16 billion by top names on Wall Street and Silicon Valley with the intention of aggregating independent sellers on Amazon's marketplace. Aggregators caught the eye of high-profile investors resembling L Catterton, BlackRock and even Jared Kushner's Affinity Partners.
In 2022, cracks started to appear as enterprise capital funding for cash-burning startups dried up and e-commerce demand cooled as consumers returned to physical stores. Aggregators suddenly struggled to profitably operate the brands they acquired.
Former high-flyer Thrasio, an early leader within the aggregator space, filed for bankruptcy in February and lost several key executives. Consolidation amongst aggregators has accelerated over the past 12 months. Before the take care of Paris-based Branded, Heyday considered a possible tie-up with Dragonfly, whose backers include L Catterton, before talks fell through, CNBC previously reported.
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