An Amazon contract worker pulls a cart with packages for delivery in New York City, U.S., on Monday, April 22, 2024.
Angus Mordant | Bloomberg | Getty Images
Amazon Aggregators Branded and Heyday are planning to merge, according to CNBC, as the e-commerce industry, which has boomed during the COVID era, continues to consolidate.
In a memo to employees on Monday, Heyday CEO Sebastian Rymarz said the combined company would form a new entity called Essor, which means “to fly” in French, and which “embodies the vision of taking the brand to new heights through the platform.”
The new name is expected to be officially announced in the coming days, and the combined company is expected to generate annual revenue of $400 million, Rymarz wrote.
Bloomberg, citing people familiar with the matter, reports that Apollo Global Management and BlackRock are in talks to provide new debt financing to the combined company to allow it to make additional acquisitions.
“This merger is the culmination of an effort that began more than a year ago to find a partner who, as we have said in the past, can advance our mission, accelerate our progress toward our goals and strengthen our balance sheet,” Rymarz said. “Branded is the perfect partner.”
Representatives for Heyday and Branded did not immediately respond to requests for comment. BlackRock declined to comment and Apollo did not immediately respond.
In connection with the merger, Heyday is expected to make massive layoffs that could see up to 70% of its staff lose their jobs, according to a person familiar with the matter who asked not to be named because the layoffs haven’t been announced. Branded will absorb Heyday’s technology team and several brands, including skincare line ZitSticka and Boka, which makes fluoride-free toothpaste and other dental care products.
Heyday and Branded are part of a crowded and turbulent market of Amazon seller aggregators. Companies in this space have raised more than $16 billion from top names on Wall Street and Silicon Valley, taking advantage of low interest rates and the pandemic-driven growth of e-commerce to bring independent sellers together on Amazon’s marketplace. Aggregators have attracted the attention of big-name investors like L Catterton, BlackRock, and even Jared Kushner’s Affinity Partners.
In 2022, the cracks began to show as venture funding dried up for cash-burning startups and e-commerce demand cooled as consumers returned to physical stores. Aggregators suddenly found it difficult to operate the brands they acquired profitably.
Former high-flyer Thrasio, an early leader in the aggregator space, filed for bankruptcy in February and lost several key executives. Consolidation among aggregators has accelerated over the past year. Prior to the deal with Paris-based Branded, Heyday had explored a possible partnership with Dragonfly, which has backers including L Catterton, before talks broke down, CNBC previously reported.
see: What’s Behind the Hype and the Multi-Billion Dollar Aggregators Buying Up Amazon Sellers?
