THE DIVESTMENT CAMPAIGN
Our Client – The Vendor
A Melbourne-based family business, Market Sports Online (MSO) is Australia’s leading, authorised reseller of AFL merchandise. It distributes genuine AFL-endorsed products to consumers via its website, which enjoys a ‘page 1’ Google ranking for popular industry keywords. The Business stocks the largest range of AFL products in Australia, with more than 180 product lines covering a broad demographic that spans adult males and females, youths, babies and even pets. It holds strong relationships with AFL merchandise suppliers – a small group of specially licensed manufacturers, who form part of a supply chain tightly controlled by the AFL. MSO’s strong market positioning together with its effective marketing activities and stock management systems enabled fast growth since the Business’s establishment in 2012. Three years later it had achieved significant success in terms of customer base and revenue growth.
However, by 2014 demand had outstripped MSO’s capacity, and further growth was constrained by a lack of capital. The owners sought to identify a strategic suitor to assist the business – particularly in terms of capital investment in additional stock holdings and entry into new markets. As specialist mid-market business brokers, Johnsons Corporate was appointed to assist with a national business sale campaign to find a merger partner, while allowing the active owner to maintain his operational role in the Business.
The Business Sales Strategy
For prospective acquirers MSO represented a profitable growing business, featuring an established B2C online channel with over 21,000 unique customers. Of those, 17,000 were active and welcomed ongoing email campaigns. Additionally, future growth strategies were already in place, including: an NRL brand extension; entry into B2B sales of sport merchandise to schools, hotel groups, casinos, football clubs and car dealers, and; a rebranded web, social media, & loyalty program plan.
Johnsons Corporate’s custom research & marketing primarily focused on online &/or bricks-and-mortar Sporting Good Retailers and Wholesalers. Secondary or related markets included multi-channel online &/or bricks-and-mortar consumer retailers. Johnsons ran a proactive direct marketing campaign that uncovered 12 qualified, interested parties. Further vetting and negotiations resulted in the selection of a preferred buyer as well as a backup buyer, with Offer and Acceptance secured within 16 weeks of going to market.
(Read more about how using a Specialised Mid-Market Business Broker Approach to selling your business could get you a better outcome – just like our client).
The Strategic Trade Buyer
The purchaser, GPI Corporate (a division of GPI Group), is a leading Australian supplier of Fully Integrated Promotional Marketing Solutions to Australian businesses. Alongside its established online distribution channel for promotional merchandise and apparel, this acquisition facilitates GPI’s move into online business-to-consumer channels – boosted by the strong AFL brand.
What Our Client Had to Say
"A key element to the divestment strategy was the objective of the directors staying on in the business in both an operational and minority equity capacity. Given this requirement, it was critical that we identified a potential suitor that not only represented a strong match for the business, but also demonstrated a 'culture fit' between the relevant operators. The end result was the successful majority sale to a well-established and highly regarded import and distribution company... We were very impressed with the level of commitment and personal attention provided by Johnsons Corporate, throughout the entire divestment project."Melvyn Port & John Goggin, Directors - Market Sports Online