Corporate Divestiture of 3 Private Label Brands
This corporate carve-out offers the opportunity to acquire three private-label brands in the mobile consumer electronics and accessories markets. The brands have a large SKU selection of cell-phone accessories, wireless audio, charging devices, protective phone cases and screens. The three brands have factories with low defect rates and established MFI (Made for iPhone), an exclusive certification for Apple products.
The brands are owned by a large distribution and 3rd Party Logistics (3PL) provider which is divesting its non-core operations to focus on wholesale distribution and 3PL service offerings. The 3 brands under consideration were acquired through an acquisition of a company in 2017. Subsequently, the parent company has not focused on growing these brands and rather grow its core distribution and 3PL business. All three brands have a strong potential for growth through further product development, sales, and marketing support. The current owner is willing to enter an agreement with a buyer and offer full-service distribution support including inventory control, sales, and logistics solutions.
The cell phone and mobile accessories industry have grown exponentially in the last decade due to new entrants and multiple product launches from industry leaders every year. An increasing rate of discretionary spending on consumer electronics and accessories will continue to generate strong tailwinds for the industry. The product brands under consideration, with their established supplier and retail channels, are well-positioned to leverage this market potential.
This is an excellent opportunity for a complementary or synergistic manufacturer seeking to acquire a strong brand portfolio and partner with a large distributor. Alternatively, this could be a great acquisition for a distributor with established relationships among electronics and accessories retailers. The provided financial summary is based on the 2020 FY projections. The sale does not involve acquiring a corporate entity, assuming employees, or lease facilities.
The operating profit includes distribution overhead for the 3 brands and does not account for any SG&A or corporate overhead which may vary based on the buyer's operating model. Asking price includes $500,000 in working capital.