Apollo Global Management and BlackRock are reportedly considering providing debt financing for a merger of Amazon aggregators Branded and Heyday.
Branded is in talks to acquire Heyday in exchange for $521 million in equity in a new company, Essor, that would be worth more than $1 billion, Bloomberg reported Monday (Aug. 26), citing unnamed sources.
The deal would include debt from Apollo and BlackRock to help the new company make acquisitions in the direct-to-consumer eCommerce market, according to the report.
Reached by PYMNTS, BlackRock declined to comment on the report. Neither Apollo Global Management nor Heyday immediately replied to PYMNTS’ request for comment.
Branded was founded in 2020 as a consumer products firm focused on acquiring and scaling Fulfillment by Amazon (FBA) companies.
The company said in 2021 that it had “established the structure to thrive in the new retail paradigm, where online convenience and social proof in the form of customer reviews are the ultimate drivers of customer purchase behavior.”
It added that it aimed to capitalize on a consumer shift to online buying, the perceived value of customer ratings and reviews, and the opportunity for small and medium-sized businesses (SMBs) to thrive in an increasingly digital environment.
Amazon aggregators are built on the premise of acquiring private-label sellers that have been visible, successful and growing via Amazon, PYMNTS reported in February.
While this was a highly successful business model in the past couple of years, especially during the pandemic, fortunes changed rapidly as the growth of eCommerce hit some headwinds, funding dried up and macro pressures confronted the aggregators.
Amazon aggregator Thrasio Holdings filed for Chapter 11 bankruptcy protection in February.
Another Amazon aggregator, Benitago, filed for bankruptcy in 2023, two years after raising $325 million in funding.
Similar to others in the field, Benitago’s business model involved acquiring small third-party sellers on Amazon’s online marketplace and running them as a group, thereby providing marketing and logistics expertise and benefiting from economies of scale.
However, Benitago faced challenges as consumer preferences shifted during the later stages of the pandemic. The eCommerce sector experienced a decline as lockdowns ended, leading to a rapid reversal of fortune for Benitago, and the shrinking eCommerce market contributed to its financial difficulties.
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