Ahold acquires bol.com for € 350m from Cyrte Investments and NPM Capital. In 2011 bol.com generated net sales of € 355m (1% of Ahold’s group sales). Bol.com offers non-food categories including books, entertainment, electronics and toys. The company has a proven track record of delivering double-digit sales growth and attractive returns. Its client base is located in the Netherlands and Belgium. The transaction is expected to be EPS accretive from day one. The acquisition is subject to customary conditions and is expected to close in 2Q12.
Our View:
The acquisition of bol.com is in line with Ahold’s aim to triple online sales to € 1.5bn by 2016, to expand its non-food offering and to increase its presence in Belgium. The acquisition of Hema and Wehkamp did not materialize. Note that Ahold is currently generating about € 500m in online sales through Peapod.com in the US and Albert.nl in the Netherlands. Ahold’s online activities break even.
We suppose that the asking prices for Hema and Wehkamp were too high. The asking price for Wehkamp was rumoured to be 1.2-1.4x sales. Ahold is paying 1.0x for bol.com. Note that Ahold is sitting on non-productive cash pile of € 2.3bn (end 3Q11). We expect to be given more details on bol.com’s profitability during the conference call at 2pm.
Conclusion:
It is a small acquisition (1% of group sales) but it fits into Ahold’s strategy to expand its online business, to grow in Belgium and to expand its non-food offering.
N.B. 4Q11 results will be released on Thursday morning.
CURRENT PRICE € 10.31
TARGET PRICE € 11.50
RATING UNCHANGED - ACCUMULATE