Mercell buys Finnish e-procurement provider Cloudia
Mercell Holding ASA has announced that it has acquired the Finnish company Cloudia, an e-procurement platform, as part of a deal reportedly costing US$125.2mn. Mercell said that US109mn of the total sum will be “paid in cash” on finalising the purchase, which was completed on a cash and debt-free basis, while the remaining US$12mn will be transferred in Mercell shares during 2022. This is, however, subject to satisfaction of retention and performance targets, Mercell explained.
As a Norwegian digital-tender systems provider, Mercell says it has carried out a private placement, raising capital of around US$48mn and conducting a tap issue of US$60.4mn of its existing US$132.7mn bond issue. The company claims that part of the net proceeds of the private placement will be put towards financing the acquisition.
Terje Wibe, Chief Executive Officer of Mercell, said: “The acquisition of Cloudia represents another milestone in our consolidation of the Nordic market. Cloudia’s strong position with public buyers in Finland offers an ideal fundament to expand the supplier side of the market and cross-sell our post-award solutions.
“Further, the company has an experienced and strong management team and highly skilled employees, underpinning the impressive performance and results Cloudia has achieved. We look forward to including them in the Mercell family”, he concluded.
Also showing his excitement for the partnership, the Chief Executive Officer of Cloudia, Are Saarinen, said: “Joining forces with Mercell gives Cloudia the opportunity to become part of a pan-Nordic constellation, broadening our products and service offerings.
“This will not only cement our foothold in the Finnish market but also provide significant opportunities in the Nordic and European markets. Our combined position will prove to be highly beneficial for the company, our employees, and our large and growing customer base”, Saarinen said.
Both companies plan to complete the project of the private placement by the end of June.
What is e-procurement?
There are three types of e-procurement: business-to-consumer, business-to-business, or business-to-government. E-procurement is similar to a standard procurement process in that it involves the purchase of supplies, work, and services, except that it is done online through the internet as well as other networking systems such as electronic data interchange and enterprise resource planning.
The onset of the COVID-19 and the increase in the number of people working from home has lead to many procurement operations moving online, something which looks to become normal for many businesses in time to come.
How Covid-19 Shook Up the Who's Who of American Retail
According to the new Digital Commerce 360 Top 500 analysis report, the massive shift in ecommerce habits due to COVID-19 resulted in a windfall for the US’s largest retailers, including Amazon, Walmart and Target.
The study found that the top 500 companies generated a combined total of $849.5 billion in online sales in 2020, representing a 45.3 per cent increase YoY, the largest jump since Digital Commerce 360 began tracking the statistic in 2006 and more than double the median growth of 18.0% seen over the last decade.
Although retailers of all sizes saw an uptick from online sales, in large part, throughout the pandemic, customers looked to familiar big name brands to fulfil much of their essential needs. Demand for items began to spike as manufacturing in Asia was forced to shut down, causing supply chain shortages. As large retailers tend to hold more inventory, this became a crucial differentiator for customers, says Digital Commerce 360.
Combined, Walmart Inc., Amazon.com Inc. and Target Corp. added $265 billion in US revenue to the $791.70 billion U.S. ecommerce market in 2020, accounting for a third of the market.
Considering the need for people to stay busy during lockdowns as well as the requirements of homeschooling, it’s not surprising Joann, a crafting company, showed the fastest online growth of Digital Commerce 360’s top 500.
- In 2019, the bottom 100 of the top 500 registered the fastest growth while the top 100 showing the slowest growth rate. In 2020, however, the analysis showed the opposite, the top 100 largest companies grew at a rate greater than that of the whole, and the top 10 on the list enjoyed a growth rate even faster than the top 100.
- In 2020, collectively the top 10 grew web sales 52.5%, almost five percentage points faster than the top 100 and accounted for 62.8% of Top 500 sales, up from 59.9% in 2019.
- Who made the top 10 was shaken up some. For example, Walmart made it into the second spot, both Kroger Co. and Costco Wholesale Corp. crept into the top 10 for the first time, landing at No. 8 and No. 10 respectively
Segments of retail that enjoyed fueled courtesy of COVID included toys and hobbies, jumping an average of 24 spots in the rankings and food and beverage merchants moved up an average 23 ranks. In contrast, apparel retailers dropped an average 15 positions in the Top 500, whereas jewellery retailers fell an average of 10 spots.
Although Digital Commerce 360 attributes some of the growth to stock positions and the ability of large retailers to manage supply chain issues, even the largest internet retailer experienced disruption. In March of 2020, during the first save of the US pandemic, even the Amazonian giant found themselves running into meeting customer commitments and delivering orders on time. Order cancellations and extended lead times became commonplace. For a time, Amazon stopped fulfilling orders for items considered “non-essential”.
Despite the issues, Amazon maintained its spot as the top online retailer in North America by a large margin, representing 35.7% of all Top 500 sales. Although it should be noted that the share is down from the 36.7% it saw in 2019.
At the outset of the pandemic Etsy, a solely ecommerce company focused on handmade, vintage items and craft supplies, was expected to perform poorly. However, as supply chain shortages for face masks caused a sudden need for cloth masks, many began to turn to Etsy, tripling its stock value by June.