Australian retail conglomerate Wesfarmers has entered an agreement to acquire Catch Group for $230 million.
Should the deal be cleared by the Australian Competition and Consumer Commission, the online marketplace will continue to operate as an independent business unit under the leadership of Kmart Group managing director Ian Bailey.
Bailey noted Catch has built a successful marketplace underpinned by leading technology and data capabilities, and that these capabilities would be leveraged to grow the capabilities and accelerate the consumer-driven, omni-channel initiatives across department stores Kmart and Target.
“This will further drive best practice in supply chain, fulfilment and online execution across our brands, including opportunities for Target to secure online fulfilment capability and productivity benefits,” Bailey said.
“Catch will also benefit from the support of Kmart Group’s scale and capabilities to drive its continued growth in its existing marketplace business.”
Catch Group managing director and chief executive Nati Harpaz said the Catch team was looking forward to working with Kmart, and that the marketplace would continue to focus on delivering great value and savings to its customers.
The merger, according to Wesfarmers managing director Rob Scott, is consistent with Wesfarmers’ approach to capital allocation, focus on improving its digital and data capabilities, and investment in opportunities adjacent to its existing businesses.
“Catch Group has a high calibre management team and a leading e-commerce platform with quality fulfilment assets,” Scott said.
“This acquisition represents an opportunity to accelerate Wesfarmers and Kmart Group’s digital and e-commerce capabilities whilst continuing to invest in the unique customer and supplier proposition provided by Catch Group.”
Wesfarmers confirmed the acquisition will be funded by existing debt facilities, and is not expected to affect the business’ existing credit ratings. The business completed a demerger from Coles last year, providing further capital for investments, while retaining a minority ownership in the supermarket.