The Kogan.com (ASX: KGN) share price is up this morning after announcing an acquisition.
Kogan.com is an online business that was set up by Ruslan Kogan in 2006 in his parent’s garage. Kogan.Com offers a variety of products and services including Kogan Retail, Kogan Marketplace, Kogan Mobile, Kogan Internet, Kogan Insurance and Kogan Travel. Kogan.Com aims to offer consumers price leadership through digital efficiencies.
Why the Kogan.com share price is rising
Kogan.com announced that it has acquired Matt Blatt, which it describes as one of the country’s premier furniture and homewares retailers.
Matt Blatt was founded in 1981 and in FY19 generated $46.5 million of revenue of which approximately 20% to 25% was online.
Kogan.com is acquiring it for $4.4 million, it’s only buying the intellectual property and goodwill. The acquisition is being funded from the company’s cash reserves.
Kogan.com CEO Ruslan Kogan said: “We are pleased to bring the conic Matt Blatt brand into new ownership and relaunch the business as an online-only offering. Our acquisition of Matt Blatt gives us a springboard from which to expand our reach in the furniture and homewares market. We will be drawing on Matt Blatt’s decades of industry expertise and combining it with Kogan.com’s technology, systems and infrastructure to deliver a market-leading offering.”
Are Kogan.com shares a buy?
Well the market seems to think so – the share price is up more than 2%. I’ve been impressed by what the Kogan.com has achieved in recent years. The expansion into many different services makes sense. It creates good network effects to sell almost everything.
Growth in April 2020 was very strong, but the share price may have gotten a bit ahead of itself during this period. Kogan.com isn’t the only great tech share out there. These technology shares could be even better buys:
[ls_content_block id=”18457″ para=”paragraphs”]
Disclosure: at the time of publishing, Jaz does not have a financial interest in any of the companies mentioned.