Nella acquires 2 stores on Amazon at 60A and options worth 1.5m – Capital market

Online Trading Company

Nella Digital
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Signed a document of principles for the purchase of 2 brands and stores on Amazon (AMZN), in a deal that, if fully cooked, can reach NIS 2.3 million in cash and options. One of the stores deals in baby products and one in the beauty and health brand.

According to the report, in 2020 the stores ‘revenues totaled about $ 1.4 million, with some of the sales being made as wholesale sales from the brands’ websites. The cost of sales amounted to approximately $ 698 thousand, including shipping and packaging expenses, advertising expenses and Amazon fees amounted to approximately $ 209 thousand. The gross profit before tax last year was about $ 493 thousand. The pre-tax profitability rate in 2020 was about 35%.

Nella will initially pay $ 60,000 in cash and will issue 600,000 options, worth NIS 1.5 million, which will be met if sales targets are met. In addition, Nella will pay another $ 150,000 in grants if the stores meet the targets set in the final agreement.

“For stores that purchase about 20 different product types (SKUs), with thousands of ratings and reviews purchased on Amazon, with an average rating ranging from 4.5 to 5 stars. Some of the products are leading products in their field, and are defined as Amazon’s Choice,” Nella reported.

The company’s share is currently rising close to 4%, but this month it is at a minus 2% return, when it has fallen by 20% since the beginning of the year. The situation has been less good in the last 12 months, when the stock lost 43% of its value, precisely in the year when most of the technology sector flourished.

“The company views the acquisition of the stores as such, as the transaction is completed, as a foothold on the Amazon platform and plans to expand product sales in other countries and other sales platforms such as WALLMART, EBAY; and intends to expand activity in the above areas by launching additional products as of This agreement is in various stages of development, “it was written.