E-commerce monster merger nets 6.2 million customers

Grays Online has agreed to a reverse takeover of fellow e-commerce company Mnemon, according to a statement to the ASX.

The announcement stated that the new business will be called Grays eCommerce Group and would have gross sales exceeding $440 million, a cash reserve of $10 million after transaction costs, and a customer database of 6.2 million.

Mnemon chairperson Naseema Sparks said GEG will be "Australia's largest e-commerce group".

The current chief executive of Grays, Mark Bayliss, will transition to the same position in the new company.

He said that the buyout "makes compelling sense, bringing together two renowned names in the Australian B2B and B2C e-commerce markets."

Grays is privately held by current and former employees, along with Australian investment firm Caledonia Investments. The deal allows Gray to go public, by marriage to the already-listed Mnemon.

Grays shareholders will eventually own at least 78 percent of GEG, with the figure going up to 84 percent if all retention bonus shares are issued.

Grays Online is best known as an online auction site that caters for both consumers and businesses, covering a wide variety of verticals from industrial assets to wine. The merge brings it together with budget online department stores oo.com.au and DealsDirect, plus premium online department store TopBuy.

"Grays is a true pioneer in the Australian e-commerce industry, establishing its first online presence in 2000," said Bayliss.

"Since then it has developed the largest B2B e-commerce auction marketplace in the Asia-Pacific... and the largest independent e-commerce wine business in Australia, among other initiatives."

The Grays deal is the latest episode in Mnemon's acquisition strategy, with TopBuy and its 200,000 clients purchased only three months ago.