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Mohawk Acquires E-Commerce Assets For $15.3M, Raises FY21 Forecast

  • Mohawk Group Holdings, Inc. (NASDAQ: MWKacquired the assets of essential oil e-commerce company Healing Solutions, LLC, for $15.3 million in cash and 1.4 million shares of Mohawk’s common stock.
  • The purchase price reflects a trailing twelve-month operating income multiple of 3.8x.
  • Healing Solutions’ trailing-twelve-month revenue and operating income stood at $65.2 million and $12.7 million, respectively, during October 31, 2020.
  • Mohawk will issue 170,000 shares of Mohawk’s common stock for inventory acquired from Healing. It will also issue up to 736,912 shares in earnout consideration upon cost reduction metrics within the next 1.5 years.
  • Additionally, the company raised $14 million in gross proceeds via institutional lending worth $16.5 million with a bullet maturity in 24 months.
  • The closing cash balance stood at $37.4 million as of September 30, 2020.
  • Mohawk raised the FY21 net revenue estimates from the previous range of $290 million and $320 million to the new range of $340 million and $370 million to reflect acquisition synergies. The net income guidance stands between $1 million and $5 million. The EBITDA outlook lies between $28 million and $32 million.
  • Mohawk recently acquired the assets of e-commerce business brands Mueller, Pursteam, Pohl and Schmitt, and Spiralizer for $25 million in cash, 4.22 million Mohawk’s common stock, a promissory note of $15.8 million related to inventory acquisition, and an earnout consideration. It raised $38 million in gross proceeds by refinancing its existing term loan credit facility.

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