Online technology retailer Shoply has announced plans to merge with niche IT distributor Anyware Technologies.
Shoply will acquire 100 percent of Anyware, which includes Harris Technology, the reseller it acquired from Wesfarmers, where it was part of Officeworks. Anyware managing director Garrison Huang will also inject $1 million from another entity into Shoply to acquire a 19.99 percent stake in the public traded company and become the majority shareholder.
Anyware said it expects to turn over $50 million in revenue and $2 million EBITDA in the 2016 financial year.
Shoply’s brands include electronics retail stores Warcom and eStore, which was previously run by City Software boss Lorenzo Coppa and acquired by Shoply last year for $1.8 million.
Coppa had been a non-executive on the Shoply board, but resigns the position following this latest merger.
The new company would combine Shoply’s 49 staff with Anyware’s 75 staff. However, Anyware’s Huang said the combined company would go through a “period of restructuring” as there are opportunities for cost cutting and resource sharing.
Huang told CRN the business would benefit from the larger scale of combined companies couple with the image of a public company. “Harris Technology, eStore, and Warcom combined can deliver great synergy.
“The other businesses of Shoply [Your Home Depot and Wowbaby] can also enjoy less overhead due to shared resources such as marketing, accounting, warehousing and shipping facilities and extra buying power.”
The new company will now operate with two different streams of business, a niche IT distributor and an e-commerce business, said Huang
“Anyware will continuously service the reseller channel it has serviced for the last 17 years and ensure we deliver greater value to all existing and new resellers.
“The business of distribution will continue and also be enhanced. As a matter of fact, we have recently upgraded our SAP ERP system and also are working on a new warehouse management system to ensure our capacity in distribution is further improved," said Huang.
Shoply’s revenue for the 2015 financial year was up from $1.7 million to $18.5 million, but made a net loss of $2.6 million. This was attributed to challenges involved in the acquisition and integration of Your Home Depot.
Anyware was founded in 1996 by Victor Lee, who sold his share of the business to Huang in 2010 to focus on online retailer Mwave.
Harris Technology has changed owners a number of times over the years. It was founded in 1986 and was acquired by Coles Myer in 1999. It began shifting its focus towards online sales, shutting down the last of its brick-and-mortar stores in 2014. It continued selling online through sister company Officeworks until the acquisition by Anyware in 2015.