Toronto-based Emerge Commerce has signed a definitive agreement that will see it sell B2B e-commerce marketplace WholesalePet.com to Victoria-based Tiny for $9.25 million USD ($12.5 million CAD) in cash.
The sale comes just over two years after Emerge Commerce purchased WholesalePet in a deal valued up to $25 million USD ($31.2 million CAD), more than double its current sale price. Emerge plans to use the proceeds from the transaction to reduce its debts, including deferred payments still owed to WholesalePet from its acquisition.
Reducing debts was one of Emerge’s top priorities outlined in its Q3 earnings report.
This sale comes five months after Emerge Commerce sold off discount website WagJag for $1 million.
“The sale of [WholesalePet] marks our most substantial transaction to date, eliminating the majority of our debt, saving us an estimated $1.38 million in annual interest expense, and paving the way for a refresh scenario to double down on our profitable grocery and golf businesses, with a focus on driving organic growth in 2024,” Emerge CEO and founder Ghassan Halazon said in a statement.
Founded in 2001, WholesalePet operates as an online storefront, connecting vendors that offer a variety of bulk pet supplies to pet boutiques, pet stores, and pet service businesses. Following Emerge’s initial acquisition of WholesalePet, Halazon noted that it had an “impressive 20-year track record” of steady organic revenue growth, profitability, and cash flow.
“The business has impeccable net revenue retention and requires minimal marketing spend, with a merchant network that is now 8,000-plus strong,” Halazon said at the time.
This sale comes five months after Emerge sold off discount website WagJag for $1 million, which it originally purchased from TorStar Corp. for $500,000 in 2017.
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Following the sale of WholesalePet, which is expected to officially close before the end of the month, Emerge said it will retain four brands under its umbrella, including truLOCAL, Carnivore Club, UnderPar, and JustGolfStuff.
Both Tiny and Emerge are known for acquiring and investing in businesses, particularly in the e-commerce space. In early 2023, Tiny went public on the TSX Venture Exchange by a merger with WeCommerce, a subsidiary it created in 2019 that focused on acquiring businesses that were within the Shopify partner ecosystem.
In October 2023, Tiny closed a majority acquisition of Letterboxd, a popular social platform that allows users to discuss and review films. Terms of the transaction were not disclosed, but Letterboxd co-founders Matthew Buchanan and Karl von Randow subscribed to a private placement of Tiny Class A shares, resulting in gross proceeds to Tiny amounting just shy of $5 million.
Feature image courtesy Dan Fallak via LinkedIn.
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