An Amazon contract worker pulls a shopping cart to make a delivery in New York, U.S., on Monday, April 22, 2024.
Angus Mordant | Bloomberg | Getty Images
Amazon Aggregator companies Branded and Heyday plan to merge as a segment of the e-commerce industry that has boomed during Covid continues to consolidate, CNBC reports.
In a note to employees on Monday, Heyday CEO Sebastian Rymarz said the combined companies would form a new entity called Essor, which means “take off” in French, “which embodies our vision of taking brands to new heights through our platform,” he wrote.
Rymarz writes that the new name will be officially announced in the coming days and that the combined companies are expected to generate $400 million in annual revenue.
Apollo Global Management and BlackRock are in talks to provide new debt financing to help the combined entity make more acquisitions, according to people familiar with the matter. BloombergCite sources from people who know the matter well.
“The merger is the culmination of an effort that began over a year ago to find a partner that could help advance our mission, accelerate progress toward our goals, and strengthen our balance sheet, as we have said in the past,” 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.
As part of the merger, Heyday is expected to conduct a massive round of layoffs that could see 70% of its employees lose their jobs, according to a person familiar with the matter, who asked not to be named because the cuts have not been announced. Branded will take over Heyday’s technology group and several brands, the person said, including the skin-care line ZitSticka and Boka, which makes fluoride-free toothpaste and other oral-care products.
Heyday and Branded are part of a crowded and chaotic marketplace of Amazon seller aggregators. Companies in the space have taken advantage of low interest rates and pandemic-fueled growth in e-commerce to band together. raised more than $16 billion from top names on Wall Street and Silicon Valley with the aim of attracting independent sellers to Amazon’s marketplace. The aggregators have attracted the attention of prominent investors such as L Catterton, BlackRock and even Jared Kushner’s Affinity Partners.
Cracks began to appear in 2022 as venture capital funding dried up for cash-burning startups and e-commerce demand cooled as consumers returned to physical stores. Aggregators suddenly struggled to profitably operate the brands they had acquired.
Former pilot Thrasio, one of the pioneers in the composites field, 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 partnership with Dragonfly, whose backers include L Catterton, before talks collapsed, CNBC previously reported.
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