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Albany e-commerce company acquired for $1.1 billion

Albany e-commerce company acquired for $1.1 billion

CommerceHub deal requires shareholder and regulatory approval
Albany e-commerce company acquired for $1.1 billion
CommerceHub in the ZEN building in Albany on Tuesday, March 6, 2018.
Photographer: PETER R. BARBER

ALBANY — Albany-based CommerceHub is being acquired by two private equity firms for $1.1 billion.

The deal was announced Tuesday and is expected to close in the third quarter, provided shareholders and regulators give their approval.

The e-commerce company was founded in Albany in 1997 by Richard Jones and Frank Poore. CommerceHub remains headquartered in Albany, and most of its 320 employees work out of the ZEN building on the SUNY Polytechnic campus. Jones is chief technology officer and Poore is president and CEO.

The company’s leadership and workforce will remain in place after the acquisition, according to Eric Morton, senior vice president of strategic development at CommerceHub. No job cuts are planned, nor any relocations, and the company will retain its other offices in England and Washington state.

“We’re a software company; our biggest assets are the people,” Morton said.

Much as its name implies, CommerceHub is a hub for online commerce, connecting retail buyers, sellers and suppliers electronically. In 2017, it handled $16 billion worth of transactions for 50 client retailers ranging from Walmart to Walgreens to Whirlpool.

Morton explained that CommerceHub arranges sale and shipment of goods through its clients’ websites without the client retailer ever having to touch the product. A shopper will buy a particular sweatshirt, for example, and CommerceHub will arrange shipment directly from one of its 11,000 suppliers.

That way, the client can offer a wider array of sweatshirts and boost its sales totals without incurring the expense of acquiring all those sweatshirts, building a warehouse for them and hiring a workforce to stock and pick them.

The two companies buying CommerceHub are GTCR and Sycamore Partners. 

New York City-based Sycamore specializes in consumer and retail investments. It manages more than $3.5 billion in capital.

Since it was founded in 1980, Chicago-based GTCR has invested more than $15 billion in more than 200 companies. One of them was Albany-based pharmaceutical research firm AMRI, which GTCR and a partner firm acquired in 2017. 

The latest deal values Commercehub at $22.75 per share. In very heavy trading Tuesday, its Class A stock closed at $22.50, up 23 percent from $18.27 on Monday.

CommerceHub’s board of directors unanimously approved the deal and recommended that stockholders vote their shares in favor of the transaction. The company went public in July 2016 and would become private again if the deal is approved.

In a news release, Poore said:

“This is a significant milestone for CommerceHub and a very positive outcome for our stockholders. GTCR and Sycamore recognize the power of CommerceHub’s platform and our unique ability to transform how retailers and brands drive growth through e-commerce. Our customers rely on CommerceHub as a strategic partner to enable their most critical growth strategies, and we are confident that our relationship with GTCR and Sycamore will accelerate the development of our platform and solutions to enable the future of retail.”

Mark Anderson, managing director of GTCR, said: “Frank and the CommerceHub team have built a unique company with a highly strategic position in e-commerce. We are excited to work with Frank to continue executing on their vision for a platform and network to tie together all sources of demand, supply and delivery in global e-commerce.”

Peter Morrow, managing director of Sycamore Partners, said: “CommerceHub is a valued partner to many leading retailers. We look forward to working with the CommerceHub team to help them grow by continuing to enable retailers’ and suppliers’ e-commerce offerings.”

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