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$MWK Diversifies its E-Commerce Portfolio Through Strategic Acquisition

February 17, 2021

Mohawk Group Holdings Inc. (NASDAQ: MWK) Diversifies its E-Commerce Portfolio Through Strategic Acquisition

  • Mohawk Group Holdings Inc. designs, develops, markets, and sells consumer products guided by machine learning, natural language processing, and data analytics
  • Mohawk is on a mission to become the leading e-commerce consumer brands platform
  • The company’s acquisition of Healing Solutions, LLC, itself a leading online seller, heralded Mohawk’s entry into the essential oils sector
  • The acquisition is the latest in a string of similar business moves and is expected to increase MWK’s revenue for the 2021 financial year

Mohawk Group Holdings (NASDAQ: MWK), a growing tech-enabled consumer products company, has continued its quest to become the leading e-commerce consumer brands platform with its latest acquisition of Healing Solutions, LLC. MWK paid approximately $15.3 million in cash in addition to issuing approximately 1.4 million shares of Mohawk’s common stock. On its own, MWK has launched consumer products across four brands, spanning home and kitchen, beauty, consumer electronics, and appliances. Thus, the acquisition heralded its entry into the essential oils’ category.

Healing Solutions is a leading online seller of essential oils whose unaudited trailing-twelve-month revenue and operating income (excluding inventory liquidations) as of October 31, 2020, were approximately $65.2 million and $12.7 million, respectively. Notably, MWK paid an amount equivalent to about 3.8 times Healing Solutions’ trailing-twelve-month operating income. This amount excludes additional considerations in the form of shares allocated towards acquiring the e-commerce platform’s inventory. MWK issued 170,000 shares of its common stock for this purpose, subject to adjustments that would not go beyond 280,000 shares.

The acquisition is expected to bump MWK’s revenue upwards, as indicated by Mohawk’s adjusted outlook for the financial year 2021. MWK expects a net revenue ranging between $340 million and $370 million, up from a range of $290 million to $320 million. The Company guided 2021 Adjusted EBITDA to $28 million to $32 million. It also estimates its net income will range between $1 million and $5 million for the period ending December 31, 2021.

Healing Solutions is the latest in a string of acquisitions, which Yaniv Sarig – Mohawk Group Holdings Inc.’s co-founder and chief executive officer – hails as a step forward in the company’s mission to build the leading e-commerce consumer brands platform. “We are thrilled to enter the essential oils category, which further diversifies our e-commerce portfolio of brands. Consumable products with recurring purchases and subscription revenue opportunities that complement our hard goods brands have been on our radar.” Yaniv stated in a news release announcing the acquisition (https://ibn.fm/pYysW).

Yaniv regarded the calculated strategy “to create a supply chain and technology platform designed to operate e-commerce brands across a wide spectrum of categories at scale” as one that was continuing to bear fruit. In late 2020, MWK announced the accretive acquisition of four e-commerce brands, namely Pohl and Schmitt, Spiralizer, Mueller, and Pursteam, adding 43 new products to its portfolio (https://ibn.fm/vzT8w).

Although the CEO claimed that the company was still in the early stages of executing its ambitious goals of becoming a market leader, Mohawk Group Holdings Inc. looks poised to achieve them sooner rather than later.

For more information on Mohawk Group Holdings Inc., visit the company’s website at https://mohawkgp.com/.

In addition, the company has announced a live interview with Mohawk Group Co-Founder & CEO Yaniv Sarig (https://ibn.fm/pz2Vu).

NOTE TO INVESTORS: The latest news and updates relating to MWK are available in the company’s newsroom at https://ibn.fm/MWK

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Wednesday, February 17th, 2021 Uncategorized
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