Israeli cross-border e-commerce platform developer Global-e (Nasdaq: GLBE) today announced that it has entered into a definitive agreement to acquire US cross-border e-commerce software solutions developer Flow Commerce Inc. for up to $545 million, including performance payments, in cash and shares.
Petah Tikva-based Global-e said that the acquisition will strengthen its end-to-end platform for e-commerce brands and retailers and allow it to access to additional small merchants not currently eligible to use Global-e's services. Flow’s API-based technology will allow Global-e to provide small merchants with a solution, tailored for the needs of emerging brands, with a lightweight integration effort and advanced self-service capabilities, in combination with Global-e’s data models and AI-algorithms for conversion optimization.
The acquisition is also expected to allow Global-e to expand the scope of its exclusive relationship with Shopify to offer certain cross-border services to a broader set of merchants on the platform in addition to its current end-to-end 3rd-party solution catering to established brands. Following this expanded relationship, Global-e agreed to issue to Shopify a warrant for $70 million in Global-e shares. The company was founded in 2013 by CEO Amir Schlachet, COO Shahar Tamari and president Nir Debbi. The company held its IPO in May at a company valuation of $3.55 billion. The company's share price is currently 2.98% higher at $54.26, giving a market cap of $8.05 billion.
Debbi said, "Our platform supports cross-border trade in a smart, simple and localized manner. This acquisition follows our strategy, ultimately allowing us to serve small and emerging brands in the most sophisticated and light-weight way possible, by utilizing Flow’s cutting edge technology coupled with Global-e’s best-in-class expertise and unique data models. The combination of Flow’s small merchant solution and our existing market-leading solution for large enterprise merchants, is expected to allow us to position our platform as a leading cross-border solution for any size of merchant, from self-served lightweight solutions for small and emerging brands, all the way to complex tailor-made enterprise solutions for the world’s largest brands."
Flow cofounder and CEO Rob Keye added, "Flow's technology powers dozens of emerging brands with a fast-to-deploy and easy-to-manage cross-border solution. As the cross-border e-commerce market continues to grow, we believe that Global-e is the ideal partner for us. We believe that joining forces with Global-e will enable us to further expand our platform and solution capabilities for our existing merchant partners, accelerate our reach into new brands worldwide, and help fuel our continued growth."
Global-e agreed to acquire Flow for a base consideration of $425 million and up to $75 million in potential additional consideration based on certain financial results in 2021. The $500 million will be divided equally between cash and shares. Global-e will also pay Flow an additional $45 million in Global-e shares for certain assumed, performance-based vesting warrants for Flow shares. Flow is expected to generate $20 million in net revenue in calendar year 2021. The transaction is expected to close during the first quarter of 2022 subject to customary conditions, including regulatory approvals.
Published by Globes, Israel business news - en.globes.co.il - on November 24, 2021.
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