The sale of a controlling interest in MyWebGrocer to a California private equity firm is all about growth, MyWebGrocer CEO Rich Tarrant said Tuesday.
HGGC, formerly known as Huntsman Gay Global Capital, announced the acquisition in a news release Tuesday. Terms of the deal were not disclosed, but The New York Times, in its DealBook section, estimated the deal at being in the higher end of a $25 million to $100 million price range. No changes in management are planned, Tarrant said, and the company’s work force will remain in Winooski.
Tarrant said MyWebGrocer, which offers Internet marketing services to national grocery chains and employs 180 people at its Champlain Mill headquarters, is looking to expand overseas and that HGGC is well-positioned in Great Britain and in European Union nations.
“They have a significant presence and understanding of the U.K. and EU marketplace,” Tarrant said in an email.
Tarrant said the company, which has expressed concerns in the past about finding qualified Vermont workers, already has more than 20 open positions.
“There is no other option but to grow,” Tarrant said. “We will try our best to find the talent in Vermont or train the talent that we do find. If we cannot find it locally, then we will import it to Vermont or find talent elsewhere by opening additional offices.”
The Stripes Group, which had been the Vermont company’s main investor, sold its stake in MyWebGrocer as a part of the transaction.
MyWebGrocer’s customers include more than 140 grocery brands, including Kroger, Shoprite and Albertsons, and more than 200 consumer packaged goods brands, according HGGC’s news release. The company saw 2012 revenues increase nearly 60 percent over the previous year, the release said.
“We have always worked with investors who bring more than capital — people who are true partners that value what we have built and want to work alongside us to accelerate our growth and realize the tremendous potential of MyWebGrocer,” Tarrant said earlier in a prepared statement. “HGGC’s unique insights, proven track record with technology-enabled services businesses, and experience with founder-owned businesses make them the clear choice.”
MyWebGrocer provides a software platform that allows consumers to plan grocery visits online, including making shopping lists, downloading coupons and viewing digital circulars that outline promotional items, the news release said. MyWebGrocer’s software also allows grocery stores to fully support online transactions for in-store pick-up or home delivery.
The New York Times report said the deal was aimed at giving HGGC a digital weapon to compete against online grocery giant Amazon.
As both buying habits and advertising continue to move online, MyWebGrocer is well-positioned to gain share from both the $1 trillion grocery retail industry and the more than $4 billion that CPG companies spend on online advertising each year, the news release stated.
“Changing consumer behavior is pressuring grocers and CPGs to adopt digital solutions, and MyWebGrocer is the clear vertical market leader,” Hudson Smith, principal at HGGC, said in the release. “With new eCommerce-focused entrants seeking to take share from traditional grocers, we believe that grocers will increasingly look to MyWebGrocer to provide the technology platform that enables consumers to plan and shop online, as well as enhance the in-store experience with mobile and social offerings.”
“This investment is further proof of HGGC’s unique ability to partner with strong management teams and founders who want to continue to invest in and grow their businesses, as well as our expertise in technology-enabled services businesses” Rich Lawson, co-founder and managing partner at HGGC, said in a statement. “We look forward to supporting Rich Tarrant, his brothers, Jerry and Brian who co-founded the business, and the MyWebGrocer management team to continue to build upon the foundation of success.”
This article was updated at 8:40 p.m. Tuesday.
