The Noni B Limited (ASX: NBL) share price is on the rise on Thursday following the announcement of a new acquisition.
At the time of writing the retailer's shares are up almost 4.5% to $2.66.
What did Noni B announce?
This morning Noni B announced that it has reached an agreement with Alceon Group to acquire a 50.1% equity interest in EziBuy Limited for a nominal consideration.
EziBuy is one of the largest multi-channel retailers in Australia and New Zealand. It currently generates approximately NZ$135 million of revenue and NZ$0.4 million of normalised EBITDA. The vast majority of this comes from its online business.
The deal will see Noni B have economic ownership from October 28 2019. It will also have the option to acquire the remaining 49.9% equity interest on or prior to December 31 2020 for a consideration of $11 million in cash. The deal is subject to shareholder approval.
Why is Noni B buying EziBuy?
Noni B's managing director and CEO, Scott Evans, believes the acquisition has a lot of potential.
He said: "This will be another exciting step forward for the Group, consolidating our position as one of Australia's leading apparel retailers. It will provide a low-risk opportunity to fast-track our digital strategy, increasing our digital income to c. 20% of the combined Group's revenue."
"The terms of the transaction are very attractive for our Group and we are confident it will be highly value accretive to NBL. We have a successful record of acquiring retail businesses and improving their operational performance. It is complementary to our existing portfolio of brands, offering cross-selling opportunities, new category growth and geographical expansion for both businesses," he added.
Noni B isn't the only company announcing an acquisition today. Toll road operator Atlas Arteria Group (ASX: ALX) is in a trading halt whilst it raises funds to acquire additional interests in APRR and ADELAC.
