JAYS Group acquires the German eCommerce company KAVAJ GmbH
regulatory press release
JAYS Group AB (publ) has today, the 20th of March 2019, signed a binding agreement to acquire the German eCommerce company KAVAJ GmbH with closing date 1st of April 2019. The business of KAVAJ will strengthen JAYS Group´s B2C-strategy based on an increased online presence and sales through Amazon as well as additional online market places.
JAYS has agreed to pay 55% of the initial purchase price with JAYS shares through a directive right issues to the KAVAJ founders, and 45% of the initial purchase price as a cash payment at closing. The initial purchase price is totally 0.9 MEUR, with an additional earn-out of 30% respectively 20% of the EBITDA profit of KAVAJ during 2019 and 2020. The directive right issue to the selling parties, Kai Klement and Jörg Kundrath, is based on the average share price during a period of 10 days before and 20 days after the contract date 20th of March 2019. The average share price is based on the share price at closing of every individual trading day at Nasdaq First North. The sellers will have a lock-in of three years from the closing date of the acquisition. The cash payment of approx. 0.4 MEUR will be handled through a credit facility. The KAVAJ sales budget 2019 is about 2 MEUR with a positive EBITDA margin.
The KAVAJ founders have previously been working at Amazon in Germany and did in 2011 establish KAVAJ to build their own B2C online business. KAVAJ has during the years developed an intelligent IT-platform and ecosystem to handle online sales on Amazon and eBay with smart connections to price-comparison portals, reviews-handling and other sales generating features to support the sales growth. The experience and knowledge of KAVAJ how to grow online sales through market places like Amazon has been recognized internationally within the online and eCommerce community. The founders have also published their own book “The KAVAJ case” that describes the methods and ways to growth the online sales via Amazon, and the case is also used as one of the reference cases on Amazon´s own global website. ”The experience and unique knowhow that we earned during our years at Amazon has been fundamental when starting-up the KAVAJ online sales and for our continuous success. KAVAJ has during its short history established a stable B2C online business through mainly Amazon based on our intelligent IT-platform and niche product portfolio of mobile accessories. Being able to utilize and leverage on the JAYS Group´s product portfolio, the additional brands and the increasing product line we are confident that we could scale-up our full potential online”, says Kai Klement, founder and CEO of KAVAJ.
The various online market places have during recent years played a significant role within eCommerce, both when it comes to market share and size of the global online sales. The share of the online sales through market places in general and especially Amazon has increased, mainly due to the tougher competition for individual brands to succeed online but also due to the transformation of the traditional retail sales. ”Amazon’s market share stands for about 50% of all the online sales in its home market of North America, and Amazon is currently expanding its business globally with focus on primary Europe, Asia but also the other parts of the world. JAYS Group will through the acquisition of KAVAJ get possession and control of leading B2C competence including unique online knowhow as well as the ecosystem and access to the online market channel of Amazon globally. KAVAJ today has 100% of its sales online based on a limited, still very attractive, product line within Smart Mobility & Accessories. By adding the brands and the product portfolio of JAYS Group within Audio & Sound and Smart Mobility, the KAVAJ case will reach its full potential within the next coming years” confirms Henrik Andersson, CEO of JAYS Group.
KAVAJ designs and markets a high-quality and niche product assortment for smartphones, tablets and smart watches etc, all in genuine leather, for Apple products. ”JAYS Group will through the acquisition of KAVAJ primary get the access to a global sales- and marketing online business. The fact that KAVAJ, in addition to its B2C experience, also offers an own designed product portfolio within the Smart Mobility vertical will enhance the financials of the acquisition even more. The synergies between KAVAJ and JAYS will create improved economics of scale and increased profitability. The JAYS Group’s subsidiary Krusell has since 1991 designed, developed and manufactured similar products as KAVAJ offers for all various smartphone brands, which provides the potential to expand the product portfolio of KAVAJ based on our extensive experience and the Krusell production facility in Thailand” says Ulf Sandberg, CEO at Krusell United and Board Member of JAYS Group.
The KAVAJ acquisition will be integrated and included in the JAYS Group business from the second quarter 2019, and the Amazon online strategy of KAVAJ will gradually be implemented for the JAYS Group´s brands including Jays Headphones, Krusell, Pagalli, Walk on Water and Clint Digital. The acquisition is the first step in the implementation of the JAYS Group´s new B2C online strategy to annually grow the share of online sales in the company group of 10%, with the long-term objective to within a five years period have the online sales ratio of 30 – 50% of total sales revenue of JAYS Group.
Jays Group´s future growth will be based on both organic- and acquisition driven growth. The new strategy focuses on creating long-term shareholder value and the acquisitions are planned to be executed within the verticals of audio-, mobile-, electronics- or design. The objective is to acquire additional and new technologies, innovative designs, strong brands, complimenting products or product portfolios and solutions within smart connectivity. As communicated earlier by JAYS Group the acquired companies could also contribute to open up new business, markets or marketing channels. With the acquisition of KAVAJ as the foundation of B2C business, JAYS is continuing the efforts to create and implement an increased online focus for JAYS´s independent and strong brands and product portfolios.
Advisor: Advokatfirman Vinge KB has acted as legal counsel to Jays Group for its acquisition of KAVAJ GmbH.
For inquires or more information, please contact:
Henrik Andersson, CEO of Jays Group
Mobil: +46 761 99 35 55
Email: henrik@jaysheadphones.com
The information consists of such content which Jays Group (publ) has to publish as per the EU´s MAR regulations. The information has been provided, through the above contact person, for publication the 20th of March 2019 at 02:30PM.
About JAYS Group AB
Jays Group AB is a publicly listed company on Nasdaq First North. Jays was founded in 2006 with a vision that everyone should have the opportunity to experience great sound and designs.
JAYS Group has in 2018 expanded into the Smart Mobility vertical with the acquisition of KRUSELL AB with a brand legacy of designing and manufacturing high-quality mobile accessories since 1991 with a strong dedication and Nordic appeal in this area. Within the Audio & Sound vertical JAYS Group did in 2019 acquire the award-winning Danish speaker brand CLINT® Digital. The product range of CLINT® is mainly developed and designed in Denmark and strongly focuses on the Nordic design and simple functionality. CLINT® creates digital products that include state-of-the-art technology, sophisticated design and user-friendliness for everyone with No wires – no cables – no hassle and will in 2019 expand into the Smart Speaker area.
Jays vision and growth strategy is based on strong organic growth with profitability in combination with acquisition-driven growth within the audio segment and other close related verticals within consumer electronics such as smart-connectivity and mobile products. In 2017 Jays Group announced the new Group strategy, with a target of a yearly turnover of 200 MSEK by the end of 2019 and approximately 300 MSEK by the end of the three-year period 2018-2020. JAYS Group currently has offices in Sweden, Germany, Hong Kong, Mainland China, Thailand, where its 100% owned production facility is located.
Jays Group´s long-term financial objective is to have annual growth in net sales of 20 percent with a profit of minimum 10 percent EBITDA margin and an equity ratio (solidity) over 30 percent. The company does not publish forecasts and will not present updated detailed forecasts to the market. The business will merely be focusing on meeting the long-term financial targets as per its 3 years group-strategy presented in November 2017. The Jays Group has a strategy plan to make several acquisitions coming years with the objective to diversify and create a strong company group with a focus on long-term profitable growth.
Jays Group AB (publ) is a public company listed at Nasdaq First North. Certified Adviser is Redeye AB with email-address certifiedadviser@redeye.se and phone +46 8 121 576 90.
Tags: