Why CommerceHub Is Buying ChannelAdvisor (ECOM)

By Amit Chowdhry ● Sep 6, 2022
  • CommerceHub announced it is buying ChannelAdvisor (ECOM) for $23.10 per share. This is why.

CommerceHub announced it is buying ChannelAdvisor (ECOM) for $23.10 per share.

Why: CommerceHub and ChannelAdvisor Corporation (NYSE: ECOM), a leading provider of cloud-based e-commerce solutions that enable brands and retailers to increase global sales, announced they have entered into a definitive agreement for CommerceHub to acquire the outstanding shares of ChannelAdvisor in a transaction led by global software investor and current shareholder of CommerceHub, Insight Partners. And under the terms of the agreement, ChannelAdvisor stockholders will receive $23.10 per share in cash, representing a premium of approximately 57% over the company’s closing stock price on September 2, 2022, the last full trading day prior to this announcement. The boards of directors of both companies have unanimously approved the transaction.

How the combination of the companies will expand capabilities for brands:

— Brands will be able to manage their public and private marketplaces alongside their retailer connections with a single vendor, improving efficiency by unifying first-party, dropship, and third-party integrations.

— Retailers are going to be able to access an even larger pool of brands, with over 18,000 customers transacting more than $50 billion in gross merchandise value (GMV) and more than $500 million in digital marketing and retail media ad spend annually across the combined network.

— Companies across the network will be able to save on delivery costs and improve delivery experiences with Delivery Suite, and improve their consumer experience with Shoppable Media and Brand Analytics.

Transaction details: Investors that participated in this transaction include Insight Partners, GTCR, Sycamore Partners, and Goldman Sachs Asset Management. The financing for the transaction is being provided by Sixth Street and Golub Capital LLC.

The proposed transaction is not subject to a financing condition and is expected to close in 2022. And the transaction is subject to customary closing conditions, including receipt of regulatory approvals and approval by ChannelAdvisor’s stockholders. The companies will operate independently until the proposed transaction is finalized.

Upon completion of the transaction, ChannelAdvisor will become a privately held company and shares of ChannelAdvisor common stock will no longer be listed on any public market.

KEY QUOTES:

“CommerceHub and ChannelAdvisor have both established themselves as leading solutions for different segments of online retailers and brands. By coming together, we can provide an even broader network, enabling our combined customers to grow their businesses by discovering new products, new brands, and new channels.”

— Bryan Dove, CEO, CommerceHub

“This is a tremendous opportunity for our customers, for our team members and our shareholders. This transaction positions the combined company to accelerate innovation and help shape the future of commerce.”

— David Spitz, CEO, ChannelAdvisor