Q22022

Q32022

Q42022

Q12023

Q22023

M&A

summary

WilltheDigitalCommerceM&Amarketbethefirsttorecover?

ForseveralconsecutivequartersattheheightofCovid,frenziedtechM&Aactivitywenthandinhandwith

frenziedIPOandfundraiseactivity.IntheM&Aadvisoryspace,thiswastranslatedintoseveral“dual-track”

processes,withmanytechbusinessesoptingtoexplorelate-stagefundingopportunitiesandresortingtoan

M&Aprocessdependingonmarketresponse.

Inthelatterhalfof2022,transactionactivityinthe

DigitalCommercesectordroppedfromthehistoricallyunprecedentedhighsofQ12022.Now,in2023,deal

activityappearstobepickingupagain:wesawatotal

1,017dealsclosedinthefirsthalfof2023,with491dealsinQ1and526dealsinQ2.Thisisamarkeddecreaseon2022figures,butahugeincreaseonpre-pandemic

figures,confirmingourassumptionthatthedigital

commerceM&Amarketwouldsoonreturntomore

normaldeal-making.

TheM&Amarketisslowlyinchingitswaybackupto

moremomentuminthespace,possiblybenefitingfromthemuchslowerrevivalofIPOandfundraisemarketsacrosstechanddigitalcommerceinparticular.

TotalnumberofDigitalCommerceM&Atransactionsbyquarter,2017-2023

692

644

606

571

538

488491

461

442

392

368

351

324

324319

420

407

408

560

549

526

358

377

373

356

326

Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3201720172017201720182018201820182019201920192019202020202020

Source:451Database,S&PCapitalIQ,HampletonResearch.

Q4Q1Q2Q3Q4Q1202020212021202120212022

Covidhigh

4,650

Numberofactiveacquirersin

thepast30months

10%

Shareofactiveacquirersthatmade

>1acquisitioninpast30months

1|10DigitalCommerceM&AOverview2H2023

TopacquirersofDigitalCommercetargets,2021-2023

Acquisitionsin30months

Acquirers

ThreenotableDigitalCommerceacquisitions

TequilaWorks-Videogamedeveloper

Tencen騰訊

12

1CEntertainment-produceranddeveloperofvideogamesInflexionStudios-Videogamedeveloper&designer

accenure

11

Fiftyfive5-Customerinsights&advisoryservices

MacGregorPartners-SCMSaaS&consultingservices

Romp-Digitalmarketingservices

11

Adplay-DigitaladvertisingSaaS&services

RadionomyGroup-Onlineradiocreationservice

HybridTheoryGlobal-Digitaladvertisingservices

10

Pixelynx-Musicmetaversegamingsoftware

WeplayMedia-Mobilegamepublisher&developer

TinyTrap-EducationalgamesSaaS

10

TuxedoLabs-Videogamedeveloper

CrystalDynamics/EidosInteractiveCorporation-VideogamespublisherLostBoysInteractive-Videogamessoftware

10

HardsuitLabs-Videogamesdeveloperstudio

DigitalMediaManagement-Socialmediamarketingservices

LabCom-PR&marketingcommunicationsagency

10

FirewalkStudios-Videogamedevelopment&publishing

SavageGameStudios-Mobilegamesdeveloper

RepeatTechnologies-Onlinegamingservices

9

Wedge-Gamingmarketingservices

DigitalassetsofJuanFutbol-Digitalsoccercontent

WorldSoccerTalk(assets)-Soccer-focusednewswebsite

Source:451Database,S&PCapitalIQ,HampletonResearch.

2|10DigitalCommerceM&AOverview2H2023

Subsectorbreakdown

Shareofdealcountbysubsectorin1H2023

InternetServices&Portals

Digitalcommerceservices,analysis&referenceproviders,onlineadvertising,directories,search,exchanges,education.

21%

20%

DigitalCommerceSoftware

Digitalmarketingande-commercesoftware,CRM,advertisingenablement,marketingautomation.

Agencies&ServicesProviders

9%

Mobile&webmarketing,e-mailmarketingandmeasurement,campaignmanagementservices,webdesign&development.

Media,Social&Gaming

13%

Socialnetworking,onlinegames,e-sports,entertainment,onlinecommunities,video,blogs,music,newscontent.

37%

OnlineRetail

E-commerceretailers,onlinemarketplaces,classifieds,auctions.

250

200

150

100

50

-

TotalnumberofM&Atransactionsbysubsector&byquarter,2017-2023

Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2

'17'17'17'17'18'18'18'18'19'19'19'19'20'20'20'20'21'21'21'21'22'22'22'22'23'23

InternetServices&PortalsOnlineRetailMedia,Social&Gaming

Agencies&ServicesProvidersDigitalCommerceSoftware

Source:451Database,S&PCapitalIQ,HampletonResearch.

ThissubsectorbreakdownshowsfluctuationsinM&AactivityacrossvarioussegmentsofDigitalCommerce.Whiletransactionvolumeacrossallsubsectorsbroadlyconvergedinmid-to-late2022,withsector-specific

idiosyncrasiesdampenedbythetechcrisis,in2023weareseeingvolumesreturntotheirmoreindividual

cycles.ActivityintheAgencies&ServiceProviders

segmenthasseenasteadyincreasesinceearly2022,

whileDigitalCommerceSoftware,OnlineRetailand

Media,Gaming&Socialareonlygraduallyreturningtostablelevelsafterpeakingin2021.ThesteepestdecreasecanbeseenindealstargetingOnlineRetail,having

dropped33%comparedtoQ22022,and63%comparedtoQ22021.

3|10DigitalCommerceM&AOverview2H2023

|3

16.3x

3x

.

1.5x

DigitalCommerceSoftware

Moredealsdespiteminimalmomentum

Inthefirsthalfof2023,transactionactivityinthe

DigitalCommerceSoftwarepickedupagain:wesaw234dealsclosedinthehalf-year,comparedto322in

1H2022and191in1H2021.Thisconfirmsourexpectationthatthemarketwouldnaturallyreadjusttomore

normaldeal-making,albeitsubstantiallyhigherthanpre-pandemiclevels.

Thetrailing30-monthEBITDAmultiplebouncedbacktoahealthy14.3xinQ22023,onceagainexceedingpre-pandemicprofitabilitymultiples.Meanwhile,the

trailing30-monthmedianrevenuemultiplereachedacomfortable3.3xinQ22023.ItseemsM&Ainthis

segmentisseeingsomerenewedinterestand

competitionamongacquirers.

200

150

100

50

-

18.0x

15.7x15.7x

14.6x14.6x▲▲

13.4x13.4x13.4x13.4x13.4x13.4x13.4x13.0x

▲▲▲▲▲▲▲12.5x12.5x12.5x12.5x12.8x△▲12.5x

10.6x

2.1x2.1x2.0x2.0x2.0x2.5x2.7x2.7x3.0x2.9x3.0x3.6x3.3x3.3x3.3x3.3x3.3x4.2x4.5x4.5x3.8x3.3x3.8x3.5x3.8x3.3x

13.5x13.5x13.9x14.3x

12.0x

10.0x

Q2'17

Q3'17

Q4'17

Q1'18

Q2'18

Q3'18

Q4'18

Q1'19

Q2'19

Q3'19

Q4'19

Q1'20

Q2'20

Q3'20

Q4'20

Q1'21

Q2'21

Q3'21

Q4'21

Q1'22

Q2'22

Q3'22

Q4'22

Q1'23

Q2'23

Q1

'17

■TransactioncountTralng30-monthmedlanEV/STrallng30-monthmedanEV/EBlTDASource:451Database,S&PCapitalIQ,HampletonResearch.

Alltrailing30-monthmedianmultiplesarecalculatedasthemedianvalueofalldisclosedmultiplesinthesectoroverthepast30months.This

calculationmethodhelpssmoothoutthedatawhich,ifpresentedonaquarterlybasis,wouldbeskewedbyextremelyhighorlowvalues.

10.0x

8.0x

6.0x

4.0x

2.0x

0.0x

Trailing30-monthmedianEV/revenuemultiple

40.0x

30.0x

20.0x

10.0x

0.0x

1

22.2x

4.3x

7.3x

Trailing30-monthmedian

EV/EBITDAmultiple

In1H2023,thetrailing30-monthmedian

revenuemultiplestayedsteadyat3.3x,whilethetrailing30-monthmedianEBITDAmultiple

inchedupto14.3x.

However,thesevaluesonlydepictamid-point

amongstabroaderrangeanddependona

multitudeoffactors,includinggrowthrates,

profitmargins,geographyanddomainexpertise.

Whilethetrailing30-monthmedianrevenue

multiplecameinat3.3x,50%ofalldealswereinthe1.5xto6.3xrangewithaminimumof0.2x

andamaximumof46.2x..

Thetrailing30-monthmedianEBITDAmultiplestoodat14.3x,with50%ofalldealsinthe7.3xto22.2xrange.Moredramatically,theminimum

EBITDAmultiplepaidoutwas1.1x,whilethe

maximumwas37.8x.

4|10DigitalCommerceM&AOverview2H2023

5|10DigitalCommerceM&AOverview2H2023

SMEs,particularlyin

automatedmarketinganddataeconomyanalytics,willincreasethanksto

MailUp.Itsheadcountwillgrowbyaround260,

followingtheadmissionofGrowenemployeesinItaly,SpainandDenmark.

technologyplatform,

extensivedigital

promotionsretailnetwork,andproprietarydatawith

Neptune’sbroadin-store

networkanddeepdata-

drivenshoppermarketinginsightsacrossin-storeandprintmedia.

DigitalCommerceSoftware(cont.)

PE-backedTeamSystembuystoplocal

marketingautomationplayer

InFebruary,Italy-basedTeamSystem,anenterprisesoftwareandtrainingprovider,announcedits$77

millionacquisitionoftheMailUpemailandmarketingsuitefromMilan-HQedGrowens.InItaly,MailUpalsoincludesContactLab’scustomerdataandmarketingcloud,aswellasAcumbamail,aSpanishemail

marketingandtextmessagingsendoutplatform.

MailUpalsohasaNordicssubsidiary,whichincludestheDanishemailmarketingplatformGlobase.

AccordingtoTeamSystem,itsvaluepropositionserving

Feb2023

ACQUIRED

$77million

NeptuneandQuotientjoinforcesthroughPE

backedtake-private

InJune,Charlesbank-backedNeptuneRetailSolutionsannounceditwouldcombinewithQuotientTechnology,adigitalpromotionsandmediatechnologycompany,inatake-privatetransactionwhichwillrender

Charlesbankthemajorityshareholderofthejoint

entity.Neptuneisanomnichannelretailmarketing

companywithanetworkofin-storeanddigital

solutions,.

Accordingtotheacquirer,thecombinationofQuotient

andNeptunebringstogetherQuotient’sinnovative

Jun2023

ACQUIRED

$395million

Jun2023

ACQUIRED

$901million

Media,Social&Gaming

Dealvolumeonanewlevel,valuationsontherise

TheMedia,Social&GamingsectorwastransformedwiththeonsetofCOVIDinQ42020.Asaresult,transaction

countroseby134%from2020to2021.Inthefirsthalfof2023,transactionstotalled147,asteepdeclinecomparedto1H2022and1H2021figuresbutkeepingbroadlyinlinewithpre-pandemiclevels.

Trailing30-monthEBITDAmultiplesinchedupwardstoahealthy12.6x,whilethecorrespondingrevenue

multiplewasstableat3.3x.

200

180

160

140

120

100

80

60

40

20

-

14.8x14.8x15.0x14.3x14.8x14.5x

13.4x13.4x

12.9x

12.5x

10.1x10.0x10.3x10.1x10.3x10.5x

2.5x2.6x2.6x2.6x2.4x2.4x2.4x2.4x2.8x2.6x2.8x2.8x2.8x2.8x2.7x2.8x3.1x3.1x3.3x3.3x3.3x3.5x3.3x3.3x3.7x3.3x

15.0x15.0x

10.6x10.6x

13.4x

14.0x

12.6x

10.0x

10.0x

10.3x

Q2'17

Q3'17

Q4'17

Q1'18

Q2'18

Q3'18

Q4'18

Q1'19

Q2'19

Q3'19

Q4'19

Q1'20

Q2'20

Q3'20

Q4'20

Q1'21

Q2'21

Q3'21

Q4'21

Q1'22

Q2'22

Q3'22

Q4'22

Q1'23

Q2'23

Q1

'17

■TransactioncountTrallng30-monthmedanEV/STrallng30-monthmedanEV/EBITDASource:451Database,S&PCapitalIQ,HampletonResearch.

Alltrailing30-monthmedianmultiplesarecalculatedasthemedianvalueofalldisclosedmultiplesinthesectoroverthepast30months.This

calculationmethodhelpssmoothoutthedatawhich,ifpresentedonaquarterlybasis,wouldbeskewedbyextremelyhighorlowvalues.

London-listedEntainpursuesinorganicgrowth

Followingits2022acquisitionofBetCity,aDutchsportsbettingandgamingoperator,EntainhascontinueditsacquisitionspreethisyearwithtwonewdealsinEMEA.

InApril,Entainacquired365Scores,asportsdataand

resultsfirminIsrael,for$150million,with$10millioninthewingsoncethecompanymeetscertainmilestones.Inastatementabouttheacquisition,Entainreiteratedthattheacquisitionisanotherstepforwardinitsambitious

growthplans.

365scores,availableinmanycountries,isacross-mediaplatformthatprovidesscoreupdates,free-to-play

games,socialmediacontent,andmore.Italsoallowsits15millionactiveuserstoconfiguretheiraccountstobe“personalisedchannels”thatshowonlytheteamstheywanttofollow.

InJune,Entainannounceditwouldbeacquiringall

sharesofWarsaw-listedSTS–Poland’slargest

bookmaker–for$901million.Theacquisitionissetto

6|10DigitalCommerceM&AOverview2H2023

becarriedoutbytheEntainCentralandEasternEurope(CEE)unit,inpartnershipwithprivateequityfund

EMMACapital,whoarecommittedtofunding25%of

theoffer.

DealmakersoutlinedthattheacquisitionofSTS

presentstheoutrightopportunityforEntaintobecometheleadingsportsbettingplatformforCEE,takingthegoldpodiumplaceintheregion’slargestmarketplace.

Apr2023

ACQUIRED

$150million

Tradeweb

May2023

ACQUIRED

$83million

InternetServices&Portals

Dealvolumeandvaluationsbackontherise

TransactionvolumesintheInternetServices&Portalssectorsawrenewedvigorinthefirsthalfof2023,with231dealsin1H2023.

Whilerevenuemultipleshavebeenstableoverthepast

sixyears,EBITDAmultiplesreachedarecordhighat15.2xinQ22023.

250

200

150

100

50

-

15.4x15.2x15.2x

▲▲△▲▲▲9.6x

2.3x2.8x3.0x2.9x3.1x3.2x3.1x3.2x3.2x3.2x3.4x3.3x3.1x3.2x2.8x2.7x2.8x2.9x3.0x2.9x2.8x2.8x2.9x2.9x2.9x2.9x

10.7x10.1x10.5x10.4x10.3x10.3x

11.3x11.7x11.5x12.3x11.5x11.9x11.3x11.4x11.0x11.1x11.2x11.8x12.7x12.8x13.1x

10.4x

Q2'17

Q3'17

Q4'17

Q1'18

Q2'18

Q3'18

Q4'18

Q1'19

Q2'19

Q3'19

Q4'19

Q1'20

Q2'20

Q3'20

Q4'20

Q1'21

Q2'21

Q3'21

Q4'21

Q1'22

Q2'22

Q3'22

Q4'22

Q1'23

Q2'23

Q1

'17

■TransactioncountTrallng30-monthmedanEV/STrallng30-monthmedanEV/EBITDASource:451Database,S&PCapitalIQ,HampletonResearch.

Alltrailing30-monthmedianmultiplesarecalculatedasthemedianvalueofalldisclosedmultiplesinthesectoroverthepast30months.This

calculationmethodhelpssmoothoutthedatawhich,ifpresentedonaquarterlybasis,wouldbeskewedbyextremelyhighorlowvalues.

TradewebacquiresYieldbroker

InMay,multi-assetmarketoperatorTradewebMarketsannounceditwasacquiringYieldbroker,anAustralian

tradingplatformforAustralianandNewZealand

governmentbondsandinterestratederivativescoveringtheinstitutional,wholesale,andprimarysegments.Thetotalconsiderationamountedto$83million.Theall-

cashtransactionisexpectedtocloselaterthisyear,

subjecttocustomaryclosingconditionsandregulatoryreviews.

Thetransactionwillreportedlyleveragebothfirms’

tradingsolutionsandindustryexperiencetocreatemoreliquid,transparentandefficientfixedincomemarkets.

Yieldbroker’sdealer-to-client(D2C)anddealer-to-

dealer(D2D)institutionalandwholesalemarketplacehasoperatedasanelectronictradingplatformfordomesticcustomersinAustralianandNewZealanddebtsecurities.Australiaiscurrentlythefifthlargestpensionfund

marketgloballyandhasthetwelfthlargestsovereign

bondmarket.TheYieldbrokerplatformfacilitates

tradingofapproximatelyA$6trillionannually.

FollowingtheacquisitionAustralianinstitutions,

includingsuperannuationfunds,willgetaccessto

T.radeweb’smulti-assetTradeweb’s

liquid,global,platform.

international

clientbaseshouldbeable

totapintoYieldbroker’s

AustralianandNew

Zealandbondand

derivativemarketplaces,

aswellasthefirm’spre-

tradepricingdataoffering.

.

7|10DigitalCommerceM&AOverview2H2023

Jun2023

ACQUIRED

Notdisclosed

Agencies&ServicesProviders

Dealvolumeontheriseoverthelastyear

TransactionactivityintheAgencies&ServiceProviders

segmentskyrocketedinearly2023,withcloseto300dealsannouncedinthefirsthalfof2023comparedto196in

2H2022and150in1H2022.

Thetrailing30-monthmedianEBITDAmultiplealsosawrenewedvigor,reaching10.3x,upfromthelowof7.7xin2022,whilerevenuemultiplesremainedlevel.

180

160

140

120

100

80

60

40

20

-

16.5x

13.8x

13.2x

12.1x

11.5x

10.7x

9.9x

8.7x

7.7x8.2x7.7x

7.1x

1.7x1.7x1.7x1.7x1.7x1.7x1.4x1.3x1.2x1.2x1.2x1.2x

12.1x11.5x

8.4x8.4x

1.6x

◆

1.6x

◆

9.0x9.0x

12.6x

12.3x

10.3x

10.1x

8.9x

7.3x

7.4x

7.1x

1.4x

1.4x

1.2x

1.2x

1.2x

1.2x

1.3x

1.3x

1.2x

1.6x

1.7x

1.3x

Q2'17

Q3'17

Q4'17

Q1'18

Q2'18

Q3'18

Q4'18

Q1'19

Q2'19

Q3'19

Q4'19

Q1'20

Q2'20

Q3'20

Q4'20

Q1'21

Q2'21

Q3'21

Q4'21

Q1'22

Q2'22

Q3'22

Q4'22

Q1'23

Q2'23

Q1

'17

■TransactioncountTrallng30-monthmedanEV/STrallng30-monthmedanEV/EBITDASource:451Database,S&PCapitalIQ,HampletonResearch.

Alltrailing30-monthmedianmultiplesarecalculatedasthemedianvalueofalldisclosedmultiplesinthesectoroverthepast30months.This

calculationmethodhelpssmoothoutthedatawhich,ifpresentedonaquarterlybasis,wouldbeskewedbyextremelyhighorlowvalues.

WPPrestartingitsacquisitionspree?

WPPmadetwokeyacquisitionsin1H2023.InMarch,itacquiredObviouslythroughitsVMLY&Rbranch.

Obviouslyisatechnology-ledsocialinfluencer

marketingagencybasedinNewYork,withoperationsinSanFranciscoandParis.Foundedin2014,Obviously’s

techplatformreportedlyincreasescampaignefficiencyandenablesthecompanytoservicelarge-scalecomplexcampaignsforenterpriseclients,includingGoogle,Ford,UltaBeautyandAmazon.Itsteamofnearly100people

willjoinVMLY&R’snetwork.

InJune,WPPannounceditwasacquiringa30%stakeinMajority,aUS-basedcreativeagencyfocusedon

combiningamulticulturaltalentmodelwithmarketingcapabilities.Majoritywasfoundedin2021byCEOOmidFarhangandHallofFameathlete-turnedmogul

ShaquilleO’Neal.Majority'skeyclientstodateincludeTheCoca-ColaCompany,theNBAGLeagueandMatchGroup.In2022,itwasnamedAdweek’sBreakthrough

AgencyoftheYearandAdAge’sSmallAgencyNewcomer

oftheYear.MajoritywasalsonamedamongFast

Company’smostinnovativecompanies,alongsideWPPandOgilvy.

MajorityisbasedinAtlanta,animportantcentrefor

WPPasthebaseforagrowingnumberofclientsanda

hotbedofcreativetalent.Theagencywillmakeuseof

WPP’snewcampusinthecity,whichopeneditsdoorsthismonth.ThestrategicpartnershipbetweenWPPandMajoritywillcreateacompellinganddifferentiated

offertothecurrentandprospectiveclientsofboth

companies.Majorityspecialisesin“disruptivecreativitythatmovesculture”acrossservicesincluding

advertising,strategicplanning,digital,branded

entertainment,design,productinnovation,

experiences,artandactivism.

Mar2023

ACQUIRED

Notdisclosed

8|10DigitalCommerceM&AOverview2H2023

v.yingtobetheleadingone-stopshopforpetowners,

includingforpetmedicinesandprescriptions.PetSmartin2021launcheditsonlinepharmacy,Petcois

expandingitsnetworkofin-storevetclinics,andChewyisofferingincentivestovetstofunnelprescriptions

throughChewy.

OnlineRetail

OnlineRetailtransactionsstabilizing?

Afterapeakindealvolumeinthesecondandthird

quarterof2021,transactionvolumessawadecline,withtransactionvolumein1H2023atitslowestsince2015.

However,weareseeingaminorboostinnumbersagaininQ22023.

AfterasimilardeclineinmedianEBITDAmultiples,weareseeingmultiplespickupagainin2023,witha

trailing30-monthmedianof10.4xinQ22023followingtheslightupswingstartingin2023.

180

160

140

120

100

80

60

40

20

-

14.5x14.5x14.0x14.2x14.5x14.5x14.6x14.5x14.5x

12.4x12.4x12.4x

11.6x

10.8x10.5x

10.0x10.0x10.0x9.8x▲▲▲9.8x9.4x9.9x

0.8x1.0x1.0x1.0x1.0x1.0x1.0x1.1x1.1x1.2x1.2x1.0x1.2x1.2x1.2x1.0x1.1x1.4x1.4x1.4x1.4x1.4x1.4x1.4x1.4x1.4x

10.9x10.9x10.9x

10.4x

Q2'17

Q3'17

Q4'17

Q1'18

Q2'18

Q3'18

Q4'18

Q1'19

Q2'19

Q3'19

Q4'19

Q1'20

Q2'20

Q3'20

Q4'20

Q1'21

Q2'21

Q3'21

Q4'21

Q1'22

Q2'22

Q3'22

Q4'22

Q1'23

Q2'23

Q1

'17

■TransactioncountTrallng30-monthmedanEV/STrallng30-monthmedanEV/EBITDASource:451Database,S&PCapitalIQ,HampletonResearch.

Alltrailing30-monthmedianmultiplesarecalculatedasthemedianvalueofalldisclosedmultiplesinthesectoroverthepast30months.This

calculationmethodhelpssmoothoutthedatawhich,ifpresentedonaquarterlybasis,wouldbeskewedbyextremelyhighorlowvalues.

PetcareretailsuccessfulbeyondCovidpeak

RetailbrandsintheonlinepetcarespacepeakedattheheightofCovid,whichsawamarkedriseintheownershipofpets,

otherwiseknownasthe“petboom”.SomearestillgarneringinterestasM&Atargets.

InJanuary,publiclytradedonlinepetmedicationsand

wellnesscompanyPetMedExpressannounceditsacquisitionofpetprescriptionandsuppliescompanyPetCareRx.Thedealwasanall-cashtransactionvaluedat$36million.

Withthisacquisition,PetMedsintendstoexpanditsaddressablemarketbeyonditscoreofferingofpet

prescriptions,andmoveintoareaslikepremiumfood,

supplements,treats,andotherpetsupplies.Ultimately,

PetMedsaimstobecome“thego-toexpertinallthingspethealthandwellness.”

PetCareRx’s10,000-itemcatalogistriplethesizeofPetMedscurrent3,000SKUcatalog.About90%ofPetMedscurrent

revenuecomesfromsalesofprescriptionmedicines.

PetCareRXbrings200,000customersand$42millionin

annualrevenuetoPetMeds.PetMedsintendstocontinuetooperatetheconsumer-facingPetCareRxecommercebrandasaseparateentity.

9|10DigitalCommerceM&AOverview2H2023

PetMedsexpectstheacquisitionwillaccelerateitsrevenuegrowthabovetheindustryaverage.whichisforecasttobe15%annually.

TheacquisitioncameninemonthsafterPetMedsannouncedapartnershipwithpettelehealthcompanyVetster.PetMedsacquiredaminoritystakeinVetsterinthatdeal,whichgivesVetsteraccesstothe2millionpetownersand70,000vets

whousePetMeds.

Thebigpetretailers-Chewy,Petco,andPetSmart-allare

Jan2023

ACQUIRED

$36million

10|10DigitalCommerceM&AOverview2H2023

Conclusion&Contacts

CovidlaunchedawaveofgrowthinDigitalCommerce.Forseveralconsecutive

quartersin2021and2021,frenziedtechM&Aactivitywenthandinhandwith

IPOandfundraiseactivity.Then,in2022,everythingsloweddowndramatically.

Thusfarin2023,weareseeinganinterestingmarketrecovery.Ontheonehand,

M&Afigureshaveregainedmomentum,withastrongnumberofdealsinQ2

2023.Ontheotherhand,wearenotyetseeingthisrecoveryinotherfinance

segmentslikefundraises–atanystage–orIPOs.Infact,totalfundraisefigures

inEuropeinDigitalCommercearedownbyroughly50%sincethehighsofQ12022,mainlyduetoalackofmegadeals.

Itisalsocrucialtodistinguishbetweenmarketfigures,whichshowabuoyantM&Amarket,andmarketsentiment,whichisoneofcautionandselectiveinvestment.Investorsareparticularlyhesitanttoinvestbecauseofhighinterestratesandagainstabackdropofnegativereportsofretailbankruptciesanddigitalcommercestruggles(forinstance,Zenloop,Gorillas,Peek&Cloppenburg,VanMoof,Missguided,orBedBath&Beyond).

Overall,however,theoutlookforDigitalCommerce,especiallyonlinesales,isgood,withM&Amarketscorroborati